In a recent ruling, Delhi High Court allowed the provisional attachment of the bank account of the during the investigation.
The bench of Justice Vibhu Bakhru and Justice Purushaindra Kumar of Delhi High Court entertained the writ petition filed by petitioner R. Enterprises against the department impugning a communication dated 06.12.2022 issued by the Respondent No.3 whereby, the petitioner’s current bank account maintained with Industrial Credit and Investment Corporation of India (ICICI) Bank was frozen.
According to the petitioner, access to its bank account was denied to it on November 5, 2021 without any elaboration, and since that date the petitioner hasn’t been able to operate the bank account.
Furthermore, the Manager of the same bank had hesitated to tell him why withdrawals from the account had been frozen on the grounds that the information was confidential.
The impugned communication, dated December 6, 2022, was made in conformity with Section 83 of the Central Goods and Services Tax Act, 2017. (CGST). According to a review of the said order, the petitioner was found to be nonexistent and had failed to respond to the summons sent by Respondent No. 3 when the notice was issued.
Section 83 of the CGST Act empowers the concerned authority to provisionally attach assets, in cases where the proceedings have been initiated under Chapter XII, XIV or XV of the CGST Act and the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue, it is necessary to issue provisional attachment.
The respondent’s side argued that information about specific entities’ conspiracy to fraudulently claim GST had been obtained from another Commissionerate (DGGI, Ghaziabad). The petitioner was allegedly recognized as one of the suspect entities.
According to Respondent No.3, petitioner has availed of a GST refund of Rs.2.4 crores and the same is under investigation.
The bench observed that in the aforesaid view, it would not be apposite for Respondent No.3 to provisionally attach the petitioner’s bank account for any amount in excess of Rs.2.4 crores.
The court further observed that Respondent No. 3 had not informed ICICI Bank of its intention to stymie transactions from the petitioner’s bank account. Therefore, the petitioner has no cause of action against Respondent No. 3 for not allowing the bank account to be functional before June December 6, 2022.
Furthermore, the petitioner is able to contact ICICI Bank to ask about the reasons for freezing the bank account if that is something that affects them. The bank is required to disclose the same to the petitioner.
The HC division bench directed the respondent side to complete the investigation and other proceedings as soon as possible.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
