Bank Account Attachment Under Tax Law Partially Lifted, Petitioner Directed to File Appeal Within Four Weeks with Limited Account Access

HC ruled on a tax dispute involving provisional bank account attachment under CGST/MGST Act. The court found previous attachment orders illegal and directed the petitioner to file an appeal within four weeks. The petitioner was allowed limited bank account access for appeal pre-deposit, while maintaining the provisional attachment. The court instructed appellate authorities to expeditiously decide any revocation applications within three weeks.

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Issues involved:
The primary issue involves the provisional attachment of the petitioner's bank account under Section 83 of the CGST/MGST Act. The petitioner challenges the jurisdiction of the respondents to attach the bank account and seeks relief through various writs and orders.

Details of the Judgment:

Provisional Attachment of Bank Account:
The petitioner, engaged in the business of manufacturing apparels, faced provisional attachment of the bank account by the respondents under Section 83 of the MGST Act. The petitioner had previously challenged the jurisdiction of the 2nd respondent to attach the bank account through a writ petition. The court disposed of the writ petition, declaring the provisional attachment as illegal and invalid under Section 83(2) of the CGST Act. The extension of the provisional attachment was also deemed illegal and set aside.

Show Cause Notice and Order-in-Original:
Subsequently, a show cause notice was issued to the petitioner under Section 122(1A) of the MGST Act, followed by an order-in-original dated 15 September, 2023. However, before the court could adjudicate on the matter, a fresh order provisionally attaching the bank account was issued on 27 June, 2023. The petitioner contended that the respondent lacked jurisdiction to issue a new attachment order after the previous orders were quashed.

Court's Decision and Directions:
The court opined that since an order-in-original had been passed by the adjudicating officer, the petitioner should appeal against it using the available legal remedy. The petitioner was advised to file an appeal within four weeks. Regarding the bank account attachment, the petitioner was allowed to apply to the appellate authority for revoking the provisional attachment, citing the illegality of the impugned order. The court instructed that such applications should be decided expeditiously, preferably within three weeks of filing.

Final Orders:
All contentions on the appeal and any interim applications were kept open. The petitioner was permitted to operate the bank account to withdraw a limited amount for the purpose of making a pre-deposit for the appeal. However, this permission did not revoke or alter the orders of provisional attachment. The petition was disposed of accordingly, with no costs imposed.

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