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.
