The Madras High Court directed the Senior Intelligence Officer, Directorate General of Goods and Service Tax to consider the lifting of provisional attachment of bank accounts to enable smooth business activities.
When the prayer sought by the assessee, M/s KPN Travel India was only to quash the summons, no direction to lift the provisional attachment of the bank accounts could have been passed by the Single judge – parallel proceedings.
In respect of the Validity of summon it was held that the assessee had rightly invoked the remedy available under sub-Rule (5) of Rule 159 of CGST Rules for lifting the attachment – on receipt of the request for lifting the attachment, the appellant issued summons under Section 70 of the CGST Act – The summons issued under Section 70 of the CGST Act cannot be construed as a notice affording an opportunity of hearing to the assessee, in terms of Rule 159(5) of the CGST Rules.
The summons is in connection with the investigation initiated against the assessee-respondent, therefore, the appellant cannot take umbrage under the summons to be construed as a notice under Rule 159(5), if the assessee is able to explain to the satisfaction of the officer that the provisional attachment is not warranted, the Commissioner can exercise powers and lift the order of provisional attachment or otherwise confirm the provisional attachment.
The investigation is yet to be completed and therefore, time is yet to come for issuance of show cause notice for recovery of alleged tax due or for that matter to crystallize the alleged liability business interest of the respondent also needs to be taken into consideration while considering as to whether all bank accounts are required to be provisionally attached till final orders are passed on the assessee representation, the appellant shall consider and pass appropriate interim orders, if found tenable, considering the lifting of the provisional attachment in respect of a few bank accounts to enable the first respondent to carry on its business activities .
The division bench of Justices T.S.Sivagnanam and R.N.Manjula stayed the impugned order subject to the various directions.
Firstly, the authorized representative of the first respondent shall appear before the first respondent at 11:00 AM on March 29, 2021.
Secondly, an opportunity of personal hearing be granted to the authorized representative.
Thirdly, the first appellant is directed to pass a speaking order within 10 days therefrom.
Fourthly, since the first respondent has pleaded that their business operations are virtually crippled, till final orders are passed on the representation dated January 27, 2021, the first appellant shall consider and pass appropriate interim orders, if found tenable, considering the lifting of the provisional attachment in respect of a few bank accounts to enable the first respondent to carry on its business activities.
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