Court directs personal hearing at CGST Mumbai West for petitioner, releases bank accounts, holds garnishee notices pending decision.

The court disposed of the writ petition, directing the petitioner to appear before the Commissioner, CGST, Mumbai West Commissionerate for a personal hearing and reasoned order. The petitioner's bank accounts were released from attachment based on undertakings provided. Garnishee notices were held in abeyance pending the authority's decision. The court refrained from expressing any opinion on the case's merits, leaving the decision to the authority.

---

---

Issues Involved:
1. Legality of the communication dated 17th May, 2018, and the consequential recovery notices issued under section 87 of the Finance Act, 1994.
2. Petitioner's liability and payment of service tax and GST.
3. Freezing and de-freezing of the petitioner's bank accounts.
4. Petitioner's claim of financial difficulties and dispute over tax liability.
5. Petitioner's representation and opportunity for a hearing before the authorities.

Detailed Analysis:

1. Legality of the Communication Dated 17th May, 2018, and the Consequential Recovery Notices:
The petitioner sought to quash and set aside the communication dated 17th May, 2018, and the consequential recovery notices issued under section 87 of the Finance Act, 1994. The court noted that section 87 provides for the recovery of any amount due to the Central Government and outlines the modes of recovery. The court emphasized that the petitioner had raised several grounds disputing the liability and requested the withdrawal of these notices. The court decided that the petitioner should be given an opportunity to present its case before the authorities.

2. Petitioner's Liability and Payment of Service Tax and GST:
The petitioner, a company providing hospitality services, claimed to have faced financial difficulties due to a recession in the industry, leading to delayed payments from customers. It was asserted that the petitioner had paid some amounts towards service tax and GST liabilities but was unable to clear the full amount due to financial constraints. The petitioner disputed the liability, arguing that it did not carry out activities in India and that the services provided were deemed sales not subject to service tax. The court noted that the respondents claimed there was an admitted liability and that the petitioner had not disputed it earlier. The petitioner was directed to present its case before the Commissioner, CGST, Mumbai West Commissionerate.

3. Freezing and De-freezing of the Petitioner's Bank Accounts:
The department had issued recovery notices to the petitioner's banks, leading to the freezing of the bank accounts. The petitioner requested the de-freezing of these accounts, arguing that it had made substantial payments and faced financial difficulties. The court accepted the petitioner's undertakings, which included not claiming any refund of taxes paid and using the bank account proceeds only for regular business activities. Based on these undertakings, the court directed the release of the bank accounts from attachment.

4. Petitioner's Claim of Financial Difficulties and Dispute Over Tax Liability:
The petitioner highlighted its financial difficulties due to delayed payments from major clients and the recession in the industry. It argued that the recovery notices and freezing of bank accounts exacerbated its financial situation. The petitioner disputed the tax liability, claiming that it did not carry out activities in India and that the services provided were deemed sales. The court acknowledged these claims and directed the petitioner to present its case before the Commissioner, CGST, Mumbai West Commissionerate, for a detailed hearing and reasoned order.

5. Petitioner's Representation and Opportunity for a Hearing Before the Authorities:
The petitioner had addressed letters to the Commissioner, CGST, Mumbai West, requesting the withdrawal of recovery notices and disputing the tax liability. The court emphasized that the petitioner should be given an additional opportunity to present its case before the authorities. The court directed the Commissioner to grant a personal hearing to the petitioner and pass a reasoned order by 10th March, 2019. The court clarified that it had not expressed any opinion on the merits of the case and that the authority should decide based on the contentions raised.

Conclusion:
The court disposed of the writ petition with specific directions for the petitioner to appear before the Commissioner, CGST, Mumbai West Commissionerate, for a personal hearing and a reasoned order. The court accepted the petitioner's undertakings and directed the release of the petitioner's bank accounts from attachment. The garnishee notices were held in abeyance until the authority passed the order. The court did not express any opinion on the merits of the case and left it to the authority to decide.

---