Bank Account Freezing Challenged under CGST Act | Court Orders Respondents to Explain

The Delhi High Court heard a case challenging the freezing of a bank account under the Central Goods and Services Tax Act without proper notice. The petitioner argued that the attachment was unjustified as no notice under Section 74 of the Act had been issued. Emphasizing the requirement under Section 83(1) of the CGST Act for the Commissioner to provide written reasons before such actions, the petitioner feared the closure of their business. The Court directed the respondents to file counter-affidavits within two weeks and scheduled the next hearing for 21st September, 2020, with orders for immediate online publication and email distribution to counsel.

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Issues:
Challenge to orders attaching bank account under GST Act without proper notice.

The High Court of Delhi heard a writ petition challenging the orders dated 19th May, 2020 and 10th July, 2020 passed by the Commissioner, Central Goods and Service Tax Delhi East, attaching the petitioner's bank account at Axis Bank Ltd. The petitioner sought the de-freezing of its account, arguing that such a drastic step could only be taken if there was a proceeding under Section 74 of the Goods and Services Tax Act, for which no notice had been issued. Citing a judgment of the Gujarat High Court, the petitioner's counsel emphasized the requirement under Section 83(1) of the CGST Act for the Commissioner to record reasons in writing before taking such actions, as failure to do so could lead to the closure of the petitioner's business. The Court issued notice to the respondents and directed them to file counter-affidavits within two weeks, with the next hearing scheduled for 21st September, 2020. The order was to be uploaded on the website immediately, and a copy was to be sent to the counsel via email.

This case before the Delhi High Court involved a challenge to the freezing of a bank account under the Central Goods and Services Tax Act without proper notice. The petitioner contended that the attachment of their bank account by the Commissioner was an extreme step that could only be justified if there was a proceeding under Section 74 of the Act, for which no notice had been issued in this instance. The petitioner's counsel relied on a judgment of the Gujarat High Court to support their argument, emphasizing the requirement under Section 83(1) of the CGST Act for the Commissioner to provide written reasons before taking such drastic actions. The petitioner expressed concerns that the bank account attachment could result in the closure of their business. The High Court issued notice to the respondents and directed them to file counter-affidavits within two weeks, setting the next hearing for 21st September, 2020. The Court also instructed for the immediate uploading of the order on the website and for a copy to be sent to the counsel via email.

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