Case Law Details
S.R Traders Vs Additional Director General (Kerala High Court)
In a recent judgment dated 9.6.2023, the Kerala High Court addressed the concerns raised by S.R Traders in a writ petition (WP(C)No.12591 of 2023) against the provisional attachment of immovable properties and bank accounts under the Central Goods and Service Tax Act and Rules. The appellant contended that the orders were passed without due consideration and violated certain legal provisions. Despite the dismissal of the writ petition by a learned single Judge, the appellant appealed against the judgment.
Background: The appellant, represented by Sri.Aswin Gopakumar, argued that the provisional attachment of all bank accounts would cripple their ability to conduct business during the ongoing investigation initiated by the respondents. The immovable properties had already been provisionally attached, providing sufficient security for the revenue’s interests. On the contrary, the respondents, represented by Sri. Sreelal N.Warrier, emphasized the substantial demand quantified in the show cause notice and potential additional liabilities arising from the ongoing investigation.
Court’s Deliberation: Upon hearing both sides, the court acknowledged that the value of the immovable properties might not be adequate to cover the demand outlined in the show cause notices. However, the court recognized that the appellant should not be financially stifled to the extent that it hampers legitimate business activities while simultaneously defending against the proceedings initiated by the respondents.
Modification of Judgment: The court, considering the interests of justice, decided to modify the judgment of the learned single Judge. The key modification allowed the appellant to operate two of its bank accounts during the pendency of the adjudication proceedings initiated by the respondents. This decision was aimed at ensuring that the appellant could continue its legitimate business operations while simultaneously addressing the legal proceedings against it.
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