High Court directed GST Authorities to release the bank account of petitioner where petitioner was himself willing to offer bank guarantee of the amount in dispute.

Present writ petition has been filed challenging the attachment orders dated passed by GST Authorities attaching the bank account of the Petitioner on the grounds that they have been issued without jurisdiction as well as authority of law and in violation of principles of natural justice.

Arguments by Petitioner

In the present writ petition, it has been averred that that there are no proceedings pending against the Petitioner, which is prerequisite for exercise of power under section 83 of the CGST Act. The orders of provisional attachment have been passed by the respondent no. 3 who is from CGST, Delhi (East), whereas the petitioner’s jurisdictional office is Range 10, CGST, Noida, Uttar Pradesh. Consequently, it is submitted that the officers from CGST, Delhi (East) did not have the power or jurisdiction to initiate any proceeding against the petitioner under Sections 62, 63, 64, 67, 73 or 74 of the Central Goods and Services Tax Act, 2017.

Petitioner stated that he was willing to offer a bank guarantee to the revenue from a nationalised bank of the amount in dispute claimed to be fraudulent availment of ITC i.e. Rs. 60,08,750/-.

Learned Counsel for the Petitioner on instructions states that the Bank account attached by the Respondents has a credit balance of more than ₹ 1 crore and that an appropriate amount therefrom can be retained as a security to safeguard the interest of the revenue . He further submits that on account of debit freeze in the account, the entire business of the Petitioner has come to standstill and it is not able to make payment for items imported during the Covid19 pandemic. 

However learned counsel for respondent states that he has instruction not to accept the bank guarantee. He insists on payment in cash of the entire disputed amount. He further submits that the amount claimed in the communication is tentative and is subject to further investigation and verification which is presently underway.

Order by High Court

Having regard to the facts of the present case and since the entire disputed amount as of now is being secured by the Petitioner, respondent no. 3 is directed to retain ₹ 45 lacs (Rupees Forty Five Lacs) from Current Bank Account in Axis Bank, the attached bank account of the petitioner as a security and to provisionally release/ lift the debit freeze instructions in respect of the said attached account to the petitioner, subject to the petitioner first depositing with the respondent no. 3 a bank guarantee of a nationalised bank for the balance amount of ₹ 15,08,750/- for a initial term of one year. The bank guarantee shall be renewed and kept alive during the pendency of the present petition and shall be subject to further orders. The aforesaid amount and the bank guarantee shall be retained by the Respondent No.3 as a security which shall be subject to adjudication of the final demand.

List the matter for further hearing on 10th September, 2020.

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