2025 (3) TMI 108 - HC - GST

Bank account provisional attachment upheld after adequate hearing and Section 74 adjudication completed

M/s Rajat Infra Developers Private Ltd. Versus Union of India And 4 Others

The Allahabad HC dismissed a writ petition challenging provisional attachment of petitioner's bank account. The court found that petitioner was granted ... Provisional attachment of the bank account of the petitioner - reasoned order or not - violation of principles of natural justice - HELD THAT:- In the present case, subsequent to the provisional attachment, the petitioner had approached this Court and the coordinate Bench of this Court had directed the respondent authorities to consider the objection filed by the petitioner and grant an opportunity of hearing. The petitioner availed of the said opportunity and filed his objections and was heard by the respondents authorities, which culminated subsequently in the order dated October 30, 2024 wherein the objections of the petitioner were rejected by the respondent authorities. Furthermore, in the present the case show cause notice issued under Section 74 of the Act has also been adjudicated upon and a final order passed under Section 74 of the Act. The objections of the petitioner were dealt with by the respondent authorities and the provisional attachment was justified under Section 83 of the Act for a period of one year. The said period would only come to an end on July 7, 2025. Conclusion - Since show cause notice has already been adjudicated upon and order was passed under Section 74 of the Act, the petitioner has the statutory alternative remedy under the law to file an appeal against the same. This writ petition is dismissed with liberty granted to the petitioner to approach the appellate authority in accordance with law. The High Court considered a writ petition under Article 226 of the Constitution of India where the petitioner challenged orders dated July 8, 2024, and October 30, 2024, passed by the respondent authorities. The first order involved provisional attachment of the petitioner's bank account under Section 83 of the Uttar Pradesh Goods and Service Tax Act, 2017. After the petitioner approached the High Court, the authorities were directed to consider the objections and subsequently passed a reasoned order on October 30, 2024. The order highlighted that the petitioner received service tax but failed to deposit it with the Service Tax Department. Additionally, a show cause notice was issued on July 24, 2024, leading to an order under Section 74 of the Act dated December 30, 2024, confirming demands for CGST and SGST, imposing penalties, and ordering interest recovery.The petitioner contended that the provisional attachment was arbitrary, citing a Supreme Court judgment emphasizing that such actions should be a last resort and allow for objections and hearings. However, the court distinguished the present case from the cited judgment, noting that the petitioner's objections were considered, a show cause notice was adjudicated upon, and a final order was passed. The court found the provisional attachment justified until July 7, 2025, and upheld the rejection of the petitioner's objections. The court also reviewed the October 30, 2024 order detailing the reasons for the attachment and the petitioner's non-payment of Goods and Service Tax dues.Ultimately, the court dismissed the writ petition, allowing the petitioner to appeal the decision.