Case Law Details
AAR GEE Impex Vs Directorate General Services Tax Intelligence (Delhi High Court)
The petitioner challenged the provisional attachment of its bank account issued by the Directorate General of Goods & Services Tax Intelligence on 29 May 2024. Although accounts of four firms were attached, the present petition concerns only Aar Gee Impex. The bank account remained frozen for over one year. The Court noted that under Section 83 of the CGST Act, 2017, a provisional attachment cannot operate for more than one year, a position already affirmed in prior judgments, including Tirupati Steel v. Union of India.
The Court reviewed the department’s counter affidavit, which alleged the petitioner’s involvement in GST evasion of approximately ₹11.37 lakh through fraudulent and ineligible ITC claims involving fake or non-existing firms and asserted that economic offences must be dealt with strictly. However, the Court observed that no Show Cause Notice had been issued to the petitioner or any related firm. As a result, the attachment was held unsustainable under Section 83.
Given the allegations and the department’s stance, the Court issued directions: the freezing order dated 29 May 2024 was lifted; the petitioner was permitted to operate the concerned bank account; and a minimum balance of ₹10,00,000 was required to be maintained. The writ petition and pending applications were disposed of, and a copy of the order was directed to be communicated to the bank.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. This hearing has been done through hybrid mode.
2. This is a petition challenging the provisional attachment of the bank account of the Petitioner bearing account no. 9511978969 in Kotak Mahindra Bank (Bandra (E), Mumbai Branch).
3. Vide letter dated 29th May, 2024 issued by the Directorate General of Goods & Services Tax Intelligence, Jaipur Zonal Unit accounts of four firms have been attached. However, the present petition only relates to M/s Aar Gee Impex.
4. The current account was frozen vide order dated 29th May, 2024 and more than one year has passed. Under Section 83 of the Goods and Services Tax Act, 2017, the provisional attachment order cannot operate for more than one year. The same has been consistently held by this Court in several cases including in M/s Tirupati Steel Through Proprietor Rahul Mittal v. Union of India & Ors.’, 2025:DHC:7392-DB.
5. The Court has also perused the counter affidavit which has also been filed by the Department, which states as under:
“2. It is respectfully submitted that the instant case is a case of actions which erodes the economic stability of the country itself. The active involvement of the petitioner in the present case of GST evasion of approx. Rs. 11.37 Lakh by way of fraudulently availing in-eligible/fake ITC from several fake/ non-existing firms is itself under inquiry by the Respondent/DGGI. The petitioner has prayed for invocation of highly prerogative and discretionary Writ Jurisdiction of this Hon’ble Court. Economic crimes, it is submitted, have to be dealt with sternly. The present petition is only a camouflage to cover up illegality and fraud committed by the petitioner. The current case concerns Tax/duty/Cess evasion of approx. Rs. 11.37 Lakh by way of availing fraudulent/in-eligible ITC from several fake / non-existing firms which vitally affects the economic interests of the society.”
6. It is clear that no Show Cause Notice has been issued till date to the Petitioner or any other firms. Thus, the same is liable to the set aside in terms of Section 83 of the CGST Act, 2017.
7. Considering the same and taking into account the amount of GST evasion which is alleged by the Department as also the above stand of the Department in the counter affidavit, the following directions are issued:
(i) the freezing order dated 29th May, 2024 qua the Petitioner shall stand lifted.
(ii) the Petitioner shall be allowed to operate its bank account bearing No. 9511978969 maintained with Kotak Mahindra Bank (Bandra (E), Mumbai Branch).
(iii) However, the Petitioner shall maintain a minimum balance of Rs.10,00,000/- in the said bank account.
8. The writ petition is disposed of in the aforesaid terms. Pending applications, if any, are also disposed of.
9. Copy of this order be communicated to the concerned Bank.
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