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Judicial Intervention Halts Unauthorized Tax Seizure, Mandates Deposit and Comprehensive Review of Bank Account Attachment HC ruled that tax authorities improperly attached petitioner's bank account without valid jurisdiction. The court suspended the attachment order, ...
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Judicial Intervention Halts Unauthorized Tax Seizure, Mandates Deposit and Comprehensive Review of Bank Account Attachment
HC ruled that tax authorities improperly attached petitioner's bank account without valid jurisdiction. The court suspended the attachment order, directing the petitioner to deposit the transferred sum in court registry. Respondent was instructed to provide justification for the attachment and submit relevant documents for judicial review, with further proceedings scheduled for a specified date in 2023.
Issues involved: Impugning attachment of petitioner's bank account by Commissioner, Goods and Services Tax, Gurugram without jurisdiction or valid grounds.
Analysis: The petitioner challenged the attachment of their bank account by the Commissioner, Goods and Services Tax, Gurugram, contending that the respondent lacked the authority to attach the account as the petitioner was not the taxpayer under investigation. The petitioner, a registered dealer in Delhi, highlighted that investigations against other entities led to the freezing of their account, even though there was no incriminating material against them except for receiving a sum from one of the entities under scrutiny.
The respondent argued that the petitioner should seek remedies in another jurisdiction, citing a previous case where a similar petitioner withdrew their writ petition with liberty to approach the appropriate forum. However, the court noted that the previous withdrawal did not establish a precedent depriving it of jurisdiction to entertain the present petition, especially since the petitioner's accounts were in Delhi.
The court emphasized that attaching bank accounts is a drastic measure and should be a last resort, especially when there is no substantial evidence against the account holder. Recognizing the substantial questions raised regarding the respondent's jurisdiction to attach the account, the court decided to suspend the attachment order temporarily. They directed the petitioner to deposit the transferred sum with the court registry to operate the account, ensuring compliance with the attachment order.
Furthermore, the court instructed the respondent to provide reasons for the attachment and present relevant files for the court's review in the upcoming hearing. The respondent was given time to file a counter affidavit, and subsequent filings were scheduled within specified timelines. The case was listed for further proceedings on a set date in 2023.
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