Court invalidates illegal bank account freeze under GST Act, grants de-freezing relief to petitioners.

The Court quashed and set aside the impugned order provisionally attaching bank accounts under Section 83 of the Goa Goods and Services Tax Act, 2017, as it was deemed illegal and beyond the authority's powers. The petitioners' request to de-freeze the accounts was granted, as no proceedings had been initiated against them, and the freezing was based on a misunderstanding related to a sister concern's tax default. The Court found the action of the respondent-authority to be unjustified and contrary to the law, leading to the invalidation of the order and the relief sought by the petitioners.

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Issues:
- Validity of the impugned order provisionally attaching bank accounts under Section 83 of the Goa Goods and Services Tax Act, 2017 without initiating proceedings or issuing show cause notices.

Analysis:
The petitioners sought substantive reliefs through writs of certiorari and mandamus to quash and set aside the impugned order dated 01.10.2021 and direct the Respondent No.1 to de-freeze the bank accounts provisionally attached. The Senior Counsel for the petitioners argued that the impugned order was illegal and beyond the authority's powers under Section 83 of the Goa GST Act. It was highlighted that no proceedings had been initiated against the petitioners, nor had any show cause notices been issued. The respondent-authority's action was deemed to be in clear contravention of the statutory provisions. The freezing of accounts was considered unjustified and contrary to the law, as it was based on a misunderstanding regarding a sister concern's tax default, not related to the petitioners.

The respondent No.1, through an affidavit, acknowledged that no proceedings had been initiated against the petitioners under the Goa GST Act, and no show cause notices had been issued. The Advocate General conceded this point, emphasizing the absence of any pending or initiated proceedings against the petitioners under relevant sections of the Act. It was noted that Section 83 of the Act could only be invoked if certain proceedings were pending, which was not the case here. The impugned order was seen as a result of the appointment of an officer to determine tax liability, which was insufficient grounds for freezing bank accounts under the Act.

In the final judgment, the Court concluded that the impugned order dated 1st October 2021 was unsustainable and, therefore, quashed and set aside. The petitions were allowed in terms of the prayer clauses seeking to invalidate the order and de-freeze the bank accounts. The Court made the rule absolute in the specified terms, disposing of the petitions accordingly.

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