Stay granted on bank account attachment & certificate cancellation, emphasizing legal compliance & fair process.

The court granted a stay on the provisional attachment of the bank account and the cancellation of the registration certificate, emphasizing compliance with legal procedures and the provision of hearing opportunities. The interim order permitted the department to proceed with the inquiry while ensuring the petitioner's cooperation, highlighting the importance of following the Act and Rules.

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Issues:
1. Provisional attachment of the Bank Account
2. Cancellation of registration certificate under the GST
3. Blocking of input credit ledger

Provisional Attachment of Bank Account:
The petitioner challenged the provisional attachment of the bank account, citing non-compliance with Rule 159(5) of the CGST Rules as no hearing was afforded after objections were filed. The petitioner argued that closure of the business resulted due to lack of opportunity for a hearing. The court noted the non-filing of a reply by the respondent and observed that the reply filed by the petitioner was not decided, indicating prima facie non-compliance with the rules. The court emphasized the need for relevant grounds before passing such orders, as highlighted in the Valerius Industries case.

Cancellation of Registration Certificate:
The petitioner contested the cancellation of the registration certificate under Section 29 of the CGST Act, stating that the reasons for cancellation were not adequately assigned as required by Rule 21 of the CGST Rules. The court noted the lack of grounds provided in the order for cancellation, leading to the closure of the petitioner's business. The court directed a stay on the order for cancellation of registration until the next hearing date, emphasizing strict compliance with the Act and Rules.

Blocking of Input Credit Ledger:
The petitioner raised concerns about the blocking of the input tax credit ledger without following proper procedures. It was argued that the blocking was done unlawfully, further affecting the petitioner's business operations. The court's interim order stayed the attachment of specific bank accounts and the cancellation of registration, allowing the department to proceed in accordance with the law. The court highlighted the petitioner's cooperation in the inquiry but warned that deliberate avoidance of hearings could lead to actions by the department.

In conclusion, the court directed a stay on the attachment of bank accounts and the cancellation of registration, emphasizing the need for compliance with legal procedures and providing opportunities for hearings as per the Act and Rules. The interim order allowed the department to continue with the inquiry while ensuring the petitioner's cooperation in the process.

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