2024 (1) TMI 233 - HC - GST

Validity of provisional attachment order - it is submitted that the petitioner may be permitted to operate the bank account in IDBI Bank only for the purpose of payment of GST alone and not for anything else - HELD THAT - As far as the petitioner s bank account in IDBI Bank Neelankarai Branch is concerned the petitioner is permitted to operate the said bank account only for the purpose of payment of GST alone. Therefore to that extent the provisional attachment order is ordered to be lifted. As far as the petitioner s bank account in Kotak Mahindra Bank Nasik Thatte Nagar Road Branch is concerned subject to the petitioner furnishing of the bank guarantee to an extent of sum of Rs. 5.7 Crores the attachment order is ordered to be lifted. With regard to operation of IDBI Bank account is concerned the petitioner is directed to remit a sum of Rs. 50, 00, 000/- out of the balance in IDBI Bank Account with regard to pending GST dues against which the proceedings are pending within a period of two weeks from the date of receipt of a copy of this order. Petition disposed off.

Summary

Issues involved:
Challenge to provisional attachment order under Section 83 of the CGST Act, 2017.

Summary:

Issue 1: Provisional attachment order affecting petitioner's bank accounts

The writ petition challenges a provisional attachment order passed by the 1st respondent under Section 83 of the CGST Act, 2017. The petitioner's bank accounts in IDBI Bank, Neelankarai Branch, and Kotak Mahindra Bank, Nasik Thatte Nagar Road Branch were provisionally attached, hindering operations for working capital loan, GST payments, salaries, and other dues.

Issue 2: Prayer for lifting attachment order

The petitioner sought to lift the attachment order, highlighting that a significant sum of Rs. 6.7 crores was provisionally attached without quantifying the tax amount. The petitioner proposed specific arrangements for utilizing the bank accounts for GST payments and requested appropriate orders for lifting the attachment.

Issue 3: Respondent's submissions and court's decision

The Senior Panel Counsel for the 1st respondent agreed to permit the petitioner to operate the IDBI Bank account for GST payments only. Regarding the Kotak Mahindra Bank account, the counsel requested the court to pass appropriate orders. After hearing both sides and examining the submissions, the court ordered the following:
1. The petitioner can operate the IDBI Bank account for GST payments, lifting the attachment order partially.
2. For the Kotak Mahindra Bank account, the attachment order will be lifted upon the petitioner furnishing a bank guarantee of Rs. 5.7 crores.
3. The petitioner must remit Rs. 50,00,000/- from the IDBI Bank account balance towards pending GST dues within two weeks.
4. The respective banks are directed to ensure compliance with the court's orders meticulously.

The writ petition was disposed of with no costs, and the connected miscellaneous petition was closed.