Case Law Details
Vikas Enterprises Vs Commissioner of Central Tax (GST) (Delhi High Court)
Introduction: Vikas Enterprises took its battle against an unauthorized freeze on its bank account to the Delhi High Court. A communication by an officer other than the Commissioner under Section 83 of the CGST Act came under scrutiny, raising questions about the legitimacy of such actions and the adherence to the statutory provisions of the CGST Act.
Analysis: The bone of contention in this case revolves around a communication from respondent no.2, Superintendent (Anti-Evasion) Group 1, to the State Bank of India, which essentially froze the bank account of Vikas Enterprises without prior clearance from the Department. When challenged in court, the respondents failed to justify the statutory provision under which the communication was sent. The CGST Act’s Section 83, specifically, empowers only the Commissioner to order the provisional attachment of assets, including bank accounts. In the absence of any such order from the Commissioner in this case, the action by respondent no.2 is rendered questionable.
The court relied on previous rulings, emphasizing the serious implications such freeze orders can have on a taxpayer’s business. It underscored that these powers must be wielded judiciously, with strict adherence to the Act’s provisions.
Conclusion: The Delhi High Court concluded that the Superintendent’s action to freeze the bank account of Vikas Enterprises was without legal authority. Not only was the impugned communication set aside, but the court also imposed a cost of ₹5,000 on the respondents, to be recovered from respondent no.2. This decision reiterates the importance of adhering strictly to the procedural and statutory nuances of the CGST Act and serves as a cautionary tale for officers acting outside their designated authority.
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