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

HC dismissed petition challenging bank account freezing under CGST proceedings. Court held petitioners should utilize sub-rule (5) of Rule 159 CGST Rules ... Provisional attachment of property - Objection under Rule 159(5) of the CGST Rules - Release by order in Form GST DRC-23 - Opportunity of being heard before release of attached property - Bank guarantee for defreezing ITC credit ledger - Revenue cannot freeze overdraft accountsObjection under Rule 159(5) of the CGST Rules - Provisional attachment of property - Opportunity of being heard before release of attached property - Petitioners permitted to file objection under sub rule (5) of Rule 159 of the CGST Rules and Respondent No.2 directed to decide the objection within a stipulated time. - HELD THAT: - The High Court held that, having considered the facts and the statutory scheme for provisional attachment, the appropriate course is for the petitioners to invoke the remedy provided by sub rule (5) of Rule 159 by filing Form GST DRC 22A. The Court directed the petitioners to submit the representation/objection to the Principal Additional Director General DGGI, Jaipur within one week from upload of the order and mandated that Respondent No.2 dispose of the objection expeditiously and in any event on or before 10th November 2023. The Court also clarified that the representation would be entertained without objection as to limitation, since the petitioners had been pursuing the writ petition bona fide. All contentions of the parties were expressly kept open for adjudication by the authority while deciding the representation, and the petition was disposed of accordingly.Petition disposed permitting filing of objection under Rule 159(5); Respondent No.2 to decide the objection expeditiously and by 10th November 2023; all contentions kept open.Final Conclusion: The writ petition is disposed of by directing the petitioners to file an objection under sub rule (5) of Rule 159 of the CGST Rules and by directing Respondent No.2 to decide the same expeditiously (by 10th November 2023); the petitioners' earlier interim benefit stands availed and all substantive contentions are left open; no costs. 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.