2024 (3) TMI 786 - HC - GST

Petitioner Granted Partial Fund Withdrawal from Attached Account to Meet 10% Pre-Deposit Appeal Requirement Under Section 107 CGST

HC allowed the petitioner to partially withdraw funds from a provisionally attached bank account to make a 10% pre-deposit for an appeal under Section 107 ... Provisional attachment under the CGST Act - pre-deposit for filing appeal under the CGST Act - right to operate bank account to make statutory pre-deposit - use of electronic transfer (NEFT/RTGS) for depositing statutory pre-depositProvisional attachment under the CGST Act - pre-deposit for filing appeal under the CGST Act - right to operate bank account to make statutory pre-deposit - use of electronic transfer (NEFT/RTGS) for depositing statutory pre-deposit - Permission to operate the petitioner's bank account to withdraw and deposit the amount required as pre-deposit for filing an appeal against the Order in Original, and limited lifting of the provisional attachment to that extent. - HELD THAT: - The Court examined the petitioner's request to utilise funds in the provisionally attached bank account solely for making the statutory pre deposit (10% of the disputed tax) necessary to institute an appeal under the CGST regime. The Court accepted that permitting withdrawal for the purpose of depositing the pre deposit does not constitute use of the funds for a private purpose but enables the petitioner to avail its statutory right of appeal. Relying on the same view taken in other proceedings, the Court authorised a limited and conditional relief: the provisional attachment is to be lifted only to the extent of the specified amount, the withdrawal shall be a single transaction and the petitioner may effect the deposit by electronic means (NEFT/RTGS). The permission is time bound as directed by the Court and does not decide or prejudice the merits of the underlying assessment or the appeal, which are kept open for adjudication on their merits. [Paras 3, 4]Petitioner permitted to operate the specified bank account to withdraw the specified amount for deposit as the statutory pre deposit; the provisional attachment is lifted only to that extent for a single transaction and electronic transfer is permitted; deposit to be made within the time directed by the Court; merits kept open.Final Conclusion: The petition is disposed of by authorising a limited lifting of the provisional attachment to permit a single withdrawal and electronic deposit of the required pre deposit for filing the appeal; all other contentions on merits are left open; no costs. Issues involved:The issues involved in this case include challenging the Impugned Order dated 17.3.2023 under Section 83 of the CGST Act, 2017, and seeking relief through a writ of certiorari or mandamus under Article 226 of the Constitution of India. The Petitioner also sought permission to utilize funds for making a pre-deposit required for filing an appeal under Section 107 of the CGST Act, 2017.Judgment Details:1. The Petitioner filed a Petition under Article 226 of the Constitution of India, challenging the Impugned Order provisionally attaching the Petitioner's Bank Account under Section 83 of the CGST Act, 2017. The Petitioner sought the quashing of the Impugned Order and the lifting of the provisional attachment.2. The Petitioner had previously filed a Writ Petition, and after the show cause notice was adjudicated, the Petitioner filed an Appeal under Section 107 of the CGST Act, 2017, requiring a pre-deposit of 10% of the disputed tax amount. The Petitioner sought permission to withdraw funds from the bank account to make this pre-deposit for the Appeal.3. The Court acknowledged the necessity for the Petitioner to utilize the funds for the pre-deposit, emphasizing that the amount would be deposited with the Government for the purpose of maintaining the Appeal and not for any private use. The Court noted that similar permissions had been granted in other cases.4. In light of the above, the Court disposed of the Petition by allowing the Petitioner to operate Bank Account No. 713915009 to withdraw the required amount for the pre-deposit. The Petitioner was also permitted to use electronic transfer for making the deposit, and the provisional attachment of the bank account was lifted solely for this purpose.5. The concerned Bank was directed to enable the Petitioner to make the deposit before a specified date. The Court clarified that all contentions of the parties on the merits of the Appeal were to be kept open for further proceedings.6. The Petition was disposed of with no costs imposed on either party. The parties were instructed to act as per the authenticated copy of the Court's order for compliance with the directives provided.