TaxTMI 
TaxTMI 
2018 (2) TMI 1508
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....ra Bank and Bank of Baroda, the branches of both at Surat, in which the petitioners have current accounts. 2. Mr. Shah, in support of these petitions, would submit that by its very nature the current accounts are maintained by the bankers at the request of and pursuant to a contract in that behalf with the customers/clients like the petitioners so as to facilitate day to day operations of ongoing business. 3. Mr. Shah would submit that the business activities of the petitioners are totally paralysed. These companies are engaged in the business of export of fabrics and readymade garments. They are group of companies known as "Sawlani Group". It is in the business for past 25 years. The business is conducted by complying with the provis....
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....ts. There was no resistance by the petitioners. However, all of a sudden, the petitioners were informed by their bankers that the DRI has issued the communications freezing debit balance in their accounts. In other words, the debit operations from the accounts were not to be allowed till further instructions are received from the DRI, Mumbai Zonal Unit. In view of these communications, their business operations have come to standstill. 7. Mr. Shah would submit that the powers to freeze the bank accounts are now resorted to routinely by the DRI. The DRI commences investigations. These investigations are carried out sporadically. They are spread over months together. However, before the investigations are concluded, letters are addressed t....
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....d Mr. Jetly, we have perused the writ petitions and the annexures thereto. The affidavit in reply filed by the DRI would refer to several legal provisions and facts and virtually sets out the Revenue's version on merits of the case investigated by the DRI. We have not called for any such affidavit. It is now a practice that DRI files an affidavit, relies upon the investigation and states that it has a strong prima facie case. According to the DRI, the case investigated pertains to fraudulent exports. The details of the so-called fraud are then set out in the affidavit in reply. We are not concerned with the detailed version of the DRI on merits. All that we are concerned with is the exercise of a drastic power by the DRI of freezing the....
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.... of the petitioners, at least to the Court the need and expediency for issuing such directions should be demonstrated and proved. We did not ask for any version on merits. We asked justification for issuing these communications to the bankers and beyond stating that there is a huge fraud of public revenue by availment of duty drawback for which the bank accounts have been frozen, nothing is placed before us except the allegations of the DRI. There is a difference between wrongful availment of duty drawback and fraudulent utilisation thereof. Presently, nobody can gauge for itself, much less finally, that the investigations point towards wrongful or fraudulent availment of duty drawback. These are mere allegations. On mere allegations alo....
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....tice to the petitioners. Merely because the investigations are pending, we are not inclined to accede to the request of Mr. Jetly to continue the freezing order till all investigations are concluded and show cause notices are issued. We are not inclined to presume merely on the basis of the affidavit in reply filed by the Revenue that the adjudication process will necessarily result in a demand for payment of duty, interest and penalty. In the circumstances, we propose to balance the rights and equities by passing the following order and directions. We do so accordingly. (i) We direct that in relation to each of the export transactions, which have been undertaken by the petitioners during the course of the investigation by the Revenue....