2023 (2) TMI 651 - HC - GST

Tax Authorities Ordered to Review Blocked Funds and Reconsider Petitioner's Grievances Within Four Weeks

HC issued a mandamus directing tax authorities to review blocked funds after petitioner's representation. The court mandated second respondent to consider ... Release of blocked bank funds pending adjudication - provisional attachment of bank accounts under the CGST regime - consideration of representation on merits - restraint on further attachments pending decision - judicial direction for fresh administrative decisionConsideration of representation on merits - release of blocked bank funds pending adjudication - judicial direction for fresh administrative decision - Petitioner to submit fresh representation and second respondent to decide on release of blocked funds on merits. - HELD THAT: - The Court directed that because the petitioner had not specifically sought the release of the blocked funds by a fresh representation, the petitioner must submit such a representation within one week. On receipt, the second respondent is required to consider the petitioner's grievances and pass final orders on merits and in accordance with law within four weeks. The Court framed this as an administrative remand to the revenue authority to examine the petitioner's submissions and documentary material narrated in the affidavit and to take a decision thereon rather than adjudicating the merits itself at the admission stage. [Paras 6, 7, 8]Petitioner to file fresh representation within one week; on receipt the second respondent to decide on merits within four weeks.Provisional attachment of bank accounts under the CGST regime - restraint on further attachments pending decision - Respondents restrained from attaching funds in any other bank account of the petitioner until final orders are passed on the fresh representation. - HELD THAT: - Recognising the petitioner's apprehension that further blocking of funds would impede its business, the Court directed interim protection by prohibiting respondents 1 to 3 from attaching funds in any other bank account of the petitioner pertaining to the subject demand until the second respondent passes final orders on the fresh representation. This interim restraint is limited in time and scope to preserve the status quo pending the administrative decision mandated by the Court. [Paras 8]Respondents 1 to 3 are directed not to attach funds in any other bank account of the petitioner until final orders on the representation are passed.Final Conclusion: Writ petition disposed with directions to the petitioner to submit a fresh representation within one week and to the second respondent to decide the same on merits within four weeks; interim restraint against attachment of other bank accounts until such decision; no orders as to costs. Issues:Mandamus for release of blocked funds in petitioner's bank account without due process of law.Analysis:The writ petition sought a Mandamus directing the second respondent to release blocked funds in the petitioner's bank account and refrain from blocking funds without following due process. The petitioner faced issues due to technical glitches in the GST Portal while filing GSTR-3B for July 2017, resulting in discrepancies in ITC availed. Summonses and notices were issued by the first and second respondents regarding alleged tax shortfalls and non-payment for transactions in July 2017. Despite attending enquiries and providing details, the petitioner's funds in the bank account were blocked without receiving a copy of the notice explaining the block. The petitioner's representation to release the blocked funds was not addressed adequately, leading to the writ petition.The petitioner's counsel highlighted the potential adverse impact on the petitioner's business if the funds remained blocked. The Court noted that the petitioner had not specifically requested the release of blocked funds in the bank account with the fourth respondent. It directed the petitioner to submit a fresh representation to the second respondent articulating their grievances within a week. The Court emphasized that the representation should be considered on merits and in accordance with the law, ensuring no prejudice to the respondents. The second respondent was instructed to make a final decision on the representation within four weeks, taking into account the petitioner's submissions.In conclusion, the Court disposed of the writ petition with the direction for the petitioner to submit a fresh representation regarding the blocked funds. Until a decision was made on the representation, the respondents were prohibited from attaching funds in any other bank account related to the subject demand. The judgment aimed to address the petitioner's concerns regarding the blocked funds and ensure a fair and lawful resolution within a specified timeframe.