Tax Attachment Lifted After Director's Deposit of Rs. 50 Lakhs, CGST Act Compliance Confirmed by Petitioner

HC granted relief in tax attachment case. Following deposit of Rs. 50,00,000 by petitioner's director and confirmation in Show Cause Notice, court directed lifting of bank account attachment under CGST Act. Respondents ordered to expedite Show Cause Notice disposal, allowing petitioner to operate account. No costs awarded.

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Issues involved:
The issues involved in this case are the issuance of a Mandamus to release the bank account attachment of the petitioner u/s 83 of the Central Goods and Services Tax (CGST) Act, 2017 and the validity of the provisional attachment order.

Bank Account Attachment:
The writ petition was filed to direct the first respondent to release the bank account attachment of the petitioner u/s 83 of the CGST Act, which was provisionally attached by a communication dated 01.10.2021. The petitioner's account with HDFC Bank was attached to protect the revenue, and no debit was allowed without prior permission. The petitioner was accused of providing manpower supply/bill trading and passing on ineligible credit to customers to avail ineligible Input Tax Credit.

Validity of Provisional Attachment Order:
The provisional attachment order was issued on 01.10.2021 and was valid for one year u/s 83(2) of the CGST Act. The petitioner's director deposited Rs. 50,00,000 post facto, which was confirmed in the Show Cause Notice No.9/2023 dated 06.02.2023. As the amount was deposited and confirmed, there was a direction to lift the order of attachment and allow the petitioner to operate the account. The court directed the respondents to dispose of the Show Cause Notice expeditiously.

Conclusion:
The court disposed of the Writ Petition with the observation that since the provisional order of attachment was valid for one year and the petitioner's director had deposited the required amount, the attachment order was to be lifted, and the petitioner was allowed to operate the account. The respondents were directed to expedite the disposal of the Show Cause Notice. No costs were awarded in this matter.

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