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of <h1>One bank account fully unfrozen, second unfrozen up to Rs.70 lakh, freeze remains beyond Rs.70 lakh; matter disposed</h1> HC directed that one bank account be fully unfrozen and another be unfrozen only up to Rs. 70 lakhs; the debit freeze remains effective for amounts ... Legality of recovering amount towards the Petitioner’s alleged tax liability including interest - entitlement of refund of amount deposited - validity of provisional attachment orders freezing the Petitioner's bank accounts - HELD THAT:- The account No. 02402560000407 in HDFC Bank Limited shall be unfrozen. The bank account No. 10072848146 in State Bank of India shall be unfrozen only to the extent of Rs. 70 Lacs. In other words, from this bank account only an amount of Rs. 70 Lacs will be allowed to be utilized. The debit freeze order will continue for any amount above Rs. 70 Lacs. Application disposed off. ISSUES PRESENTED and CONSIDEREDThe primary issues considered by the Court were:1. Whether the actions of Respondent No. 3 in seeking to recover a sum of Rs. 52,39,98,438/- towards the Petitioner's alleged tax liability, including interest, were illegal, without jurisdiction, and without the authority of law.2. Whether the Petitioner was entitled to a refund of Rs. 4 crores deposited on specific dates.3. Whether the provisional attachment orders freezing the Petitioner's bank accounts were valid under Section 83 of the MGST Act, 2017.ISSUE-WISE DETAILED ANALYSISIssue 1: Legality of Tax Recovery Actions- Relevant Legal Framework and Precedents: The Court considered the legality of the tax recovery actions under the authority of the MGST Act, 2017, and the constitutional protections under Articles 14, 19(1)(g), 265, and 300A of the Constitution of India.- Court's Interpretation and Reasoning: The Court noted that the recovery of tax dues must follow the procedure established by law. The Court declined to grant the relief sought in prayer clause (a) as there was no restraint on Respondent No. 3 from recovering the amount, provided the legal procedure was followed.- Conclusions: The Court concluded that the question of granting the relief sought in prayer clause (a) did not arise at this stage.Issue 2: Refund of Rs. 4 Crores- Relevant Legal Framework and Precedents: The request for a refund was considered in light of the Petitioner's willingness to seek a refund post-adjudication.- Court's Interpretation and Reasoning: The Petitioner, through counsel, stated that they were not pressing for the refund at this stage and would seek it after adjudication. The Court accepted this statement, rendering the relief sought in prayer clause (b) moot.- Conclusions: The issue of refund did not survive due to the Petitioner's statement.Issue 3: Provisional Attachment Orders- Relevant Legal Framework and Precedents: The validity of the attachment orders was assessed under Section 83 of the MGST Act, 2017, and Rule 159(5) of the CGST/MGST Rules, 2017.- Court's Interpretation and Reasoning: The Court examined whether the basic ingredients of Section 83 were followed. The Petitioner had already filed applications under Rule 159(5) challenging the attachments. The Court noted the ongoing investigation into the Petitioner's alleged misuse of Input Tax Credit (ITC) and the provisional attachment as part of this process.- Key Evidence and Findings: The investigation revealed that the Petitioner allegedly availed ITC of 29.33 crores and took a refund by manipulating transactions with a group company. The authorities concluded that approximately 52.39 crores would be payable by the Petitioner.- Application of Law to Facts: The Court allowed partial relief by unfreezing specific bank accounts to enable the Petitioner to continue its business operations, subject to conditions.- Treatment of Competing Arguments: The Court balanced the Petitioner's need to maintain business operations with the authorities' need to secure potential tax liabilities.- Conclusions: The Court ordered the unfreezing of certain bank accounts while maintaining the attachment on others, pending the outcome of the Petitioner's applications under Rule 159(5).SIGNIFICANT HOLDINGS- Core Principles Established: The Court emphasized the need for tax recovery actions to follow legal procedures and upheld the provisional attachment's validity pending further adjudication.- Final Determinations on Each Issue:1. The Court did not grant the relief sought in prayer clause (a) regarding the legality of the tax recovery actions, as the procedures were to be followed.2. The relief sought in prayer clause (b) for a refund of Rs. 4 crores was not pursued by the Petitioner at this stage.3. The Court provided partial relief by unfreezing specific bank accounts to allow the Petitioner to continue business operations, with conditions on the use of funds.The Court directed the Joint Commissioner of State Tax Investigation-A to hear the Petitioner's applications under Rule 159(5) within two weeks, ensuring a fair hearing without prejudice from this order.
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