Petitioner's GST Liability, Compliance, and Account Freeze: Requirements and Consequences

The petitioner's GST liability in Delhi is Rs. 11.5 crores and Rs. 59.24 crores PAN India. Despite freezing accounts, the petitioner made payments towards tax liabilities. To unfreeze accounts, the petitioner must deposit Rs. 5.5 crores within two days and settle remaining liabilities within 120 working days. Non-compliance triggers consequences under the CGST Act. No coercive action if terms met, with an undertaking required. The court aims to balance interests, ensuring compliance and protecting the petitioner from coercive measures within the specified period.

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Issues:
1. GST liability of the petitioner
2. Freezing of petitioner's accounts
3. Payment schedule for discharging liabilities
4. Coercive action against the petitioner

Analysis:

1. GST liability of the petitioner:
The judgment reveals that the petitioner's total GST liability in Delhi is approximately Rs. 11.5 crores, and for PAN India, it amounts to around Rs. 59.24 crores. The petitioner's counsel highlights that the company has 35,000 employees with a monthly expenditure bill of about Rs. 60.87 crores. It is noted that even during the petitioner's Managing Director's custody, payments were made towards clearing tax liabilities, indicating the petitioner's bona fides. A significant portion of the Rs. 11.5 crores due comprises interest.

2. Freezing of petitioner's accounts:
The freezing of the petitioner's accounts is causing substantial damage day by day, as mentioned by the petitioner's counsel. To address this, the petitioner proposes to deposit Rs. 5.5 crores with the department within two days of unfreezing its accounts. The remaining liabilities, including for India, are to be discharged within 120 working days from the judgment date. Any default in payment within the specified period would trigger consequences under the CGST Act.

3. Payment schedule for discharging liabilities:
The court orders that upon the payment of Rs. 5.5 crores within two days of unfreezing all accounts, no coercive action should be taken against the petitioner as long as they adhere to the undertaking provided. The petitioner is required to file an undertaking on the same day as per the court's directive. The judgment specifies that the order does not prejudice the rights and contentions of either party on the merits of the case.

4. Coercive action against the petitioner:
The judgment concludes by disposing of the petition in accordance with the terms outlined above. It instructs that a copy of the order be provided to both parties for record purposes. The decision aims to balance the interests of both parties while ensuring compliance with the payment schedule and safeguarding the petitioner from coercive actions during the specified period.

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