Case Law Details

Case Name : Glonia Impex Vs Assistant Commissioner (SIIB) (Kerala High Court)
Appeal Number : WP(C). No.8432 of 2020(D)
Date of Judgement/Order : 04/11/2020
Related Assessment Year :

Glonia Impex Vs Assistant Commissioner (SIIB) (Kerala High Court)

The petitioner who is stated to be a supplier of diamonds, and a registered dealer under the Goods and Service Tax Act, within the jurisdiction of Mumbai, states that he had supplied diamonds to M/s. Nebal Tradings during the period 2017-18 and 2018-19 and the said transaction was duly declared in the GST return filed by the petitioner and the appropriate tax also paid. It is his specific case that no investigation is pending against him and no summons or notice has been served on him till date, either by the customs authorities or by the GST authority. In the meanwhile, however, by Ext.P1 communication, the 1st respondent issued an instruction to the Banker of the petitioner to freeze its Bank account on the nebulous ground that an entity by name Nebal Trading had transferred certain amounts to the petitioner’s account. The relief sought for in the writ petition is to quash Ext.P1 order and to lift the attachment over the Bank account of the petitioner, in as much as, it is not pursuant to any proceedings that were initiated against him.

The court observed that there is absolutely no basis in law for proceeding against the petitioner herein, in connection with offences alleged to have been committed by M/s Varma enterprises. The mere fact that a part of the money that was obtained from alleged fraudulent transactions have found its way to the Bank account of the petitioner cannot, without anything to suggest the complicity of the petitioner in such transactions, be the basis for the attachment of the Bank accounts of the petitioner. Thus, there being no material to implicate the petitioner in the alleged fraudulent transaction, I find that Ext.P1 communication issued by the 1st respondent cannot be legally sustained. The writ petition is therefore allowed by quashing Ext.P1 communication and directing the 4th respondent Bank to treat the attachment over the Bank account of the petitioner with it as lifted.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

The petitioner who is stated to be a supplier of diamonds, and a registered dealer under the Goods and Service Tax Act, within the jurisdiction of Mumbai, states that he had supplied diamonds to M/s. Nebal Tradings during the period 2017-18 and 2018-19 and the said transaction was duly declared in the GST return filed by the petitioner and the appropriate tax also paid. It is his specific case that no investigation is pending against him and no summons or notice has been served on him till date, either by the customs authorities or by the GST authority. In the meanwhile, however, by Ext.P1 communication, the 1st respondent issued an instruction to the Banker of the petitioner to freeze its Bank account on the nebulous ground that an entity by name Nebal Trading had transferred certain amounts to the petitioner’s account. The relief sought for in the writ petition is to quash Ext.P1 order and to lift the attachment over the Bank account of the petitioner, in as much as, it is not pursuant to any proceedings that were initiated against him.

2. Through a statement filed on behalf of the respondents 1 and 2, details of an investigation against a firm by name M/s Varma enterprises are narrated and it is averred that proceeds of alleged illegal transactions carried on by M/s Varma enterprises were channeled through M/s Nebal Trading to the petitioner concern. Save for the tracing of funds to the petitioner firm, there is no mention of any proceedings initiated against the petitioner firm or of any offence committed by petitioner firm that would necessitate an attachment of its Bank account.

3.I have heard the learned counsel appearing for the petitioner and also the learned Standing Counsel appearing for the respondents.

On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I find that there is absolutely no basis in law for proceeding against the petitioner herein, in connection with offences alleged to have been committed by M/s Varma enterprises. The mere fact that a part of the money that was obtained from alleged fraudulent transactions have found its way to the Bank account of the petitioner cannot, without anything to suggest the complicity of the petitioner in such transactions, be the basis for the attachment of the Bank accounts of the petitioner. Thus, there being no material to implicate the petitioner in the alleged fraudulent transaction, I find that Ext.P1 communication issued by the 1st respondent cannot be legally sustained. The writ petition is therefore allowed by quashing Ext.P1 communication and directing the 4th respondent Bank to treat the attachment over the Bank account of the petitioner with it as lifted.

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