Case Law Details
Balaji Enterprises Vs Principal Additional Director General, Directorate General of GST Intelligence (Delhi High Court)
Introduction: In a significant judgment, the Delhi High Court granted Balaji Enterprises permission to operate its bank accounts, provisionally attached for more than a year by the Directorate General of GST Intelligence. This decision underscores the importance of procedural rules under the Central Goods and Services Tax Act, 2017 (CGST Act) in safeguarding taxpayer rights.
Analysis: The petitioner, Balaji Enterprises, challenged an order provisionally attaching its bank accounts. The impugned order, passed without any stated reason for protecting the interest of Revenue, was argued to be excessively broad, affecting not just the petitioner’s accounts, but also those of immediate family members and related entities. The counsel for the petitioner contended that no such powers were vested under Section 83 of the CGST Act. The respondent’s counsel pointed out that the provisional attachment order lapsed after a year, rendering it inoperative, as per Section 83(2) of the CGST Act.
Conclusion: The Delhi High Court disposed of the case, asserting that the petitioner should not be hindered from operating their bank accounts. This ruling is a crucial reminder of the temporal restrictions applied to provisional attachment orders under the CGST Act and the taxpayer’s rights to operate their accounts upon the lapse of the prescribed period. The judgment has potential implications for future cases involving provisional attachments under the GST regime.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The petitioner has filed the present petition, inter alia, impugning an order dated 20.04.2022 (hereafter ‘the impugned order’) passed by the respondents, provisionally attaching the bank account nos. 259811580205 and 201003427621 maintained with the IndusInd Bank, Punjabi Bagh, New Delhi. The impugned order is worded in extremely wide terms and apart from the bank accounts as mentioned above, it also directs attachment of any other accounts operated by the petitioner.
2. The petitioner assails the said impugned order on several grounds, including that the order was passed without any reason to believe that such an order is necessary for protecting the interest of the Revenue. In addition, Ms. Manish, learned counsel appearing for the petitioner, also points out that the said impugned order not only seeks to attach the bank accounts of the petitioner but also its immediate family members and other related entities and submits that no such powers are available under Section 83 of the Central Goods and Services Tax Act, 2017 (hereafter ‘the CGST Act’).
3. Singla, learned counsel appearing for the respondents submits that a period of one year has expired since the date of the impugned order and in terms of Sub-section (2) of Section 83 of the CGST Act, the provisional attachment order has ceased to be operative.
4. In this view, we do not consider it apposite to pass any further orders except to direct that the petitioner would not be impeded to operate the bank accounts, on account of the impugned order.
5. The petitioner has also filed a list of fifteen bank accounts including the bank accounts maintained with IndusInd Bank which were attached by separate orders passed on 20.04.2022. Mr. Singla fairly states that although the said bank accounts as set out in the Annexure P-62 of the petition, have been provisionally attached by the separate orders, the said orders have also ceased to be operative by efflux of time, by virtue of Section 83(2) of the CGST Act.
6. In view of the above, this Court considers it apposite to direct that the concerned banks shall not obstruct operation of the bank accounts on account of the provisional attachment orders dated 20.04.2022.
7. The petition is disposed of in the aforesaid terms.
