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Step 2 – Draft Generation
Once you approve the issues, the AI performs issue-wise legal research and prepares a structured draft response.
• Relevant statutory provisions • Judicial precedents and Supreme Court, High Court and other citations • Issue-wise legal analysis • Practical arguments and supporting content • Professionally structured draft ready for further review.
Tax Authorities Must Lift Indefinite Bank Account Blocks, Ensuring Fair Refund Process Under CGST Act Section 83 HC ruled that tax authorities cannot indefinitely block a bank account containing a tax refund. The court directed the respondent to reassess the account ...
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Tax Authorities Must Lift Indefinite Bank Account Blocks, Ensuring Fair Refund Process Under CGST Act Section 83
HC ruled that tax authorities cannot indefinitely block a bank account containing a tax refund. The court directed the respondent to reassess the account block under CGST Act, Section 83, emphasizing the need to follow proper legal procedures for refund review. The petition was disposed of with instructions to reconsider lifting the account freeze based on audit findings.
Issues involved: The petitioner seeks to unblock a bank account containing a refund amount sanctioned and credited, which has been partially blocked due to an audit review. The petitioner argues that the respondent cannot indefinitely block the account without following proper procedures under the Central Goods and Services Tax Act, 2017.
Summary: The petitioner filed a petition to unblock a bank account holding a refund of Rs. 34,48,080, which was partially blocked after an audit review. Despite complying with a directive to deposit Rs. 38,786, the remaining refund amount remains blocked. The petitioner contends that the respondent must follow Section 107(2) of the CGST Act if a refund review is needed.
In a previous case, the court noted the reasons for blocking the account included payment mismatches, doubts about goods procurement, and cancellation of a supplier's registration. The court ordered the freezing of the account up to Rs. 50 lakhs until further resolution. The respondent had released Rs. 15 lakhs earlier in addition to the blocked refund amount.
The court clarified that the respondent should take action under Sections 73 or 74 of the Act if they believe the refund was erroneously granted. The bank account block was made under Section 83 of the Act, which automatically ceases after one year. The court directed the respondent to reconsider lifting the block based on the audit review outcome.
The petition was disposed of with the directive for the respondent to reassess the bank account block based on the audit findings.
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