2023 (10) TMI 944 - HC - GST

Bank account freezing under CGST upheld as petitioners must use Rule 159(5) for objections instead of judicial intervention

Shah Coal Private Limited & Anr. Versus Union of India & Ors.

HC dismissed petition challenging bank account freezing under CGST proceedings. Court held petitioners should utilize sub-rule (5) of Rule 159 CGST Rules ... Freezing of Bank Accounts of petitioner - Opportunity to file objections - HELD THAT:- It will be appropriate for the Petitioners to take recourse to the provisions of sub-rule (5) of Rule 159 of the Central Goods And Service Tax Rules (CGST Rules) whereby an opportunity is available to the Petitioners to file its objections in regard to the attachment of the Petitioner’s/Assessee's property. In somewhat similar circumstances, a similar course of action is permitted in the case of ASHOK KUMAR VISHWAKARMA VERSUS UNION OF INDIA & ORS. [2023 (10) TMI 715 - BOMBAY HIGH COURT] where it has been held that The appropriate remedy for the Petitioner would be to invoke sub-rule (5) by raising an objection to the orders of attachment in question as the rule itself would permit. Thus, considering such stage of the proceedings, in the facts and circumstances of the case, the discretionary jurisdiction under Article 226 of the Constitution of India not exercised to interfere in the impugned attachment orders. This petition is disposed off permitting the Petitioners to make a representation/raise an objection against the attachment as permitted by sub-rule (5) of Rule 159 of the CGST Rules. Issues involved:The issues involved in the judgment include challenging the legality and validity of a notice/order, freezing of bank accounts, recovery of GST amounts, and defreezing of credit ledger balance.Challenge to Notice/Order:The petition filed under Article 226 sought to quash and set aside a notice/order dated 25th August, 2023, along with any consequential notices and actions taken, including freezing the bank account. Additionally, the petition sought to restrain the respondents from attaching any of the petitioner's bank accounts.Recovery of GST Amounts:The court directed Respondent Nos. 2 and 3 to initiate action against Respondent No. 6 for the recovery of GST amounts for services provided to the petitioner. The petition also requested the court to stay the effect of the impugned notice/order and to direct the respondents to refrain from blocking certain accounts.Defreezing of Accounts:The court directed Respondent No. 4 to raise the debit freeze on specific accounts held by the petitioner. Furthermore, the court instructed Respondent No. 5 to refrain from blocking certain accounts and to raise the debit freeze imposed on the electronic credit ledger.Representation Against Attachment:Considering the peculiar facts of the case, the court permitted the petitioners to file objections against the attachment of their property as per sub-rule (5) of Rule 159 of the CGST Rules. The petitioners were directed to make a representation/objection to Respondent No. 2 within a specified timeline for expeditious disposal.Conclusion:The court disposed of the petition, allowing the petitioners to raise objections against the attachment of their property. The petitioners were granted the opportunity to make a representation to the concerned authority within a week, with a directive for expeditious disposal. All contentions of the parties were expressly kept open, and the judgment was concluded with no costs imposed.