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Issues: (i) whether the department should be directed to intimate the writ applicant's debtors and permit receipt of sale proceeds in the applicant's current account, with a limited transfer to the cash credit account to prevent the account from being treated as a non-performing asset; (ii) whether the writ applicant should be permitted to supply the finished goods under provisional attachment and utilize raw materials for manufacturing, subject to compliance with the GST regime; (iii) whether the application for revocation of cancellation of GST registration could be processed in physical form and decided without insisting on online filing, and whether limited operational payments could be permitted from the cash credit account.
Issue (i): whether the department should be directed to intimate the writ applicant's debtors and permit receipt of sale proceeds in the applicant's current account, with a limited transfer to the cash credit account to prevent the account from being treated as a non-performing asset.
Analysis: The parties reached an interim understanding that the 47 debtors would be informed to make contractual payments to the writ applicant, with the amounts credited in the current account maintained with the bank. The arrangement also contemplated a limited transfer from the current account to the cash credit account only to protect the account from being classified as an NPA, while ensuring that the funds would not be used by the writ applicant.
Conclusion: The department was directed to intimate the debtors and the bank was permitted to make the limited transfer, subject to the amount remaining unavailable for use by the writ applicant.
Issue (ii): whether the writ applicant should be permitted to supply the finished goods under provisional attachment and utilize raw materials for manufacturing, subject to compliance with the GST regime.
Analysis: The finished goods were intended for supply to public sector entities and foreign contract customers, and the raw materials were required for completing existing contractual obligations. The directions were framed to balance business continuity with departmental protection, and the supply and utilization were required to be carried out in accordance with the provisions of the GST law and under supervision, with the proceeds credited into the applicant's current account.
Conclusion: Permission was granted to supply the finished goods and to use the raw materials for manufacturing, subject to compliance with the GST law and the safeguards imposed by the Court.
Issue (iii): whether the application for revocation of cancellation of GST registration could be processed in physical form and decided without insisting on online filing, and whether limited operational payments could be permitted from the cash credit account.
Analysis: The writ applicant had already filed a revocation request in physical form, and the Court treated that filing as an exceptional case. The department was directed to process that application and decide it expeditiously. The Court also allowed the applicant to make payments towards salary, operational expenses and electricity bills from the cash credit account, after the nature of the payment was verified. The statutory basis referred to the revocation mechanism under the GST framework.
Conclusion: The physical revocation application was directed to be processed, the online filing insistence was dispensed with, and limited operational payments from the cash credit account were permitted.
Final Conclusion: Interim relief was granted to facilitate business continuity and creditor protection, while preserving departmental and banking safeguards; the substantive issues were left open for final hearing.
Ratio Decidendi: Where business operations are otherwise paralysed by provisional attachment and cancellation of registration, interim directions may be issued to secure receivables, permit limited movement of goods and raw materials, and process revocation requests with suitable safeguards, provided the revenue's interest remains protected.
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