2021 (2) TMI 144 - HC - GST

Court directs Petitioners to pursue statutory remedy under Rule 159(5) of CGST Rules instead of seeking relief through writ court.

The Court directed the Petitioners to pursue the statutory remedy under Rule 159(5) of the CGST Rules, 2017 instead of seeking relief through writ court. ... Provisional attachment of bank accounts under the GST regime - availability of alternate efficacious statutory remedy - objections under Rule 159(5) of the CGST Rules, 2017 - judicial restraint and non-examination of merits where alternate remedy existsAvailability of alternate efficacious statutory remedy - objections under Rule 159(5) of the CGST Rules, 2017 - Petitioners must avail the remedy of filing objections under Rule 159(5) against provisional attachment/freezing of bank accounts instead of seeking writ relief. - HELD THAT: - The Court observed that following search action, provisional attachments were effected and that the statutory scheme provides for filing objections under Rule 159(5). Having regard to the existence of this efficacious alternate remedy, and consistent with earlier orders in similar circumstances, the Court declined to entertain the writ petitions on merits and relegated the petitioners to invoke the statutory procedure. The petitioners were granted liberty and time to file objections and to appear before the designated authority to furnish documents and information as required under Rule 159(5). The Court emphasised judicial restraint by leaving substantive contentions open for the statutory authority to decide. [Paras 3]Petitions disposed of without prejudice; petitioners directed to file objections under Rule 159(5) before the Deputy Commissioner, Anti Evasion, CGST East.Provisional attachment of bank accounts under the GST regime - judicial restraint and non-examination of merits where alternate remedy exists - Authority directed to consider and dispose of the objections filed under Rule 159(5) within a specified time-frame, with merits not examined by the Court. - HELD THAT: - The Court mandated a time bound procedure: the petitioners were to appear and file objections on the specified date and supply information as required; the concerned authority was directed to decide the objections within two weeks of receipt by passing necessary orders after due intimation to the petitioners. The Court expressly refrained from adjudicating the merits and left all contentions open for the authority's consideration, to be decided in accordance with law and uninfluenced by the Court's observations. [Paras 3, 4]Directed the designated authority to decide the objections under Rule 159(5) within two weeks; clarified that the Court has not examined merits and that parties retain remedies against the authority's order.Final Conclusion: Writ petitions seeking quashing of Form GST DRC 22 and de freezing of bank accounts were disposed of without adjudication on merits; petitioners granted liberty to file objections under Rule 159(5) before the Deputy Commissioner, Anti Evasion, CGST East, and the authority directed to decide those objections within two weeks, with the Court leaving substantive contentions open. Issues:Petition seeking quashing of Form GST DRC-22 and de-freezing of bank accounts under Section 83 of the CGST Act, 2017.Detailed Analysis:1. Petitioner's Request for Quashing of Form GST DRC-22 and De-freezing Bank Accounts:The Petitioner in two separate petitions sought quashing of Form GST DRC-22 and directions for de-freezing bank accounts maintained at United Bank of India. The accounts were frozen under Section 83 of the CGST Act, 2017 due to a scam involving fraudulent availment of ITC by multiple companies.2. Response by Respondent No. 2 and Suggested Remedy:Respondent No. 2, through learned Senior Standing Counsel, highlighted the scam uncovered during a search action under Section 67 of the CGST Act, 2017. It was mentioned that an alternate statutory remedy under Rule 159(5) of the CGST Rules, 2017 was available for the Petitioners instead of seeking relief from the writ court.3. Agreement to Statutory Remedy and Court's Decision:Counsel for the Petitioners agreed to avail the remedy under Rule 159(5) and requested a time-bound direction for the authorities to decide objections. The Court referred to a similar case and directed the Petitioners to file objections under Rule 159(5) before the Deputy Commissioner, Anti-Evasion, CGST East. The Petitioners were granted liberty to file objections and were instructed to appear before the authority with necessary documents.4. Disposition of Petitions and Clarification:The Court disposed of the petitions without prejudice to the rights of the Petitioners, emphasizing that they had not examined the merits of the case. Both parties were allowed to pursue their contentions and remedies as per the law. The concerned authority was directed to handle the objections in accordance with the law, without being influenced by any prior observations.5. Final Directions and Disposal of Petitions:The Court provided specific directions for the Petitioners to follow the statutory remedy, appear before the authority with objections, and continue to provide information as required. The authority was mandated to dispose of the objections within two weeks and notify the Petitioners. In case of further grievances, the Petitioners were granted the liberty to pursue legal remedies.This detailed analysis of the judgment showcases the issues involved, responses from both parties, the Court's decision, final directions, and the overall disposition of the petitions while preserving the legal language and significant details from the original text.