9911796707
TMI Blog2023 (5) TMI 1230X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 017261100000041 and Current Account No. 017281300000462 maintained with Yes Bank Ltd., DLF Cyber City, Gurugram) were attached under Section 83 of the Central Goods & Services Tax Act, 2017 (hereafter 'the CGST Act'). By a communication dated 10.10.2022 addressed to the Branch Manager of Yes Bank Ltd., respondent no. 1 also directed the Branch Manager, Yes Bank to hold at least Rs.643 crores in ZIPL's Escrow / Nodal Account No. 01726110000004. 2. ZIPL also impugns an order dated 01.02.2023, passed by respondent no. 1 in effect, rejecting the objections raised by ZIPL under Rule 159(5) of the Central Goods & Services Tax Rules, 2017 (hereafter 'the CGST Rules'). 3. ZIPL contends that the orders passed under Section 83 of the CGST Act are illegal as there is no ground for the respondents to believe that it was necessary to attach ZIPL's bank accounts in the interest of the Revenue. 4. ZIPL operates a payment aggregator platform under the name 'Onion-Pay'. It has onboarded various merchants on the said platform, which is used by merchants and their customers to pay for goods and services. 5. ZIPL claims that its role is limited to processing payments and it is not concerned wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IPL's objections under Rule 159(5) of the CGST Rules was rejected by an order dated 01.02.2023, which is also assailed in the present petition. Order dated 01.02.2023 13. The order dated 01.02.2023 indicates that during the course of proceedings relating to the objections preferred by the petitioner, respondent no. 1 had called upon ZIPL to furnish details showing the names, bank account numbers and IFSC codes of third-party merchants and users to whom the funds were required to be paid from the Escrow / Nodal account. In compliance with the same, ZIPL provided details of all merchants and break-up of the outstanding amount payable to them from the funds available in the Escrow/Nodal accounts. 14. Respondent no. 1 had noted in its order dated 01.02.2023 that approximately Rs.314.46 crores was available in the Escrow / Nodal Account No. 017261100000041 with Yes Bank Ltd. and out of the aforesaid amount, ZIPL had furnished a breakdown of the amounts due to 106 merchants aggregating to Rs.244.54 crores. It had not submitted any details regarding the persons to whom the balance amount of Rs.69.92 crores was required to be paid. Respondent no. 1 noted that out of the amount of Rs.244 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ZIPL was indulging in evasion of GST while providing an online payment gateway (Aggregator Services) under the trade name 'Onion-Pay'. The respondents allege that that ZIPL was supporting illegal gambling products such as 'Teen Patti', 'Roulette', 'Ludo', 'Matrix 5' and all merchants associated with the payment gateway were suspected to be fake and shell companies. Further, they allege that ZIPL had created a web of fake gaming merchant entities, which were operated and managed by ZIPL. It was claimed that a Chinese national named Jian Li was the Director of ZIPL and the mastermind in running the entire online gaming / gambling business. 18. The respondents also filed sur-rejoinder, inter alia, affirming that various new facts have emerged during investigation. They state that it was found that the application made by ZIPL to operate a payment gateway / payment aggregator has been returned by the RBI on 06.01.2023. The RBI had further advised ZIPL to stop the payment aggregation activity and directed it to close the Nodal account within one hundred and eighty days from 06.01.2023. ZIPL was further prohibited from submitting any further application or operating any payment system u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts were attached mainly for attaching the assets of some of the merchants who were using ZIPL's platform. The relevant file produced in Court also indicated that the respondents had sought to create a lien on ZIPL's account for a sum of Rs.643 crores on the basis of estimate of the tax liability owed by some of the large merchants. 24. In view of the aforesaid submission that there is no issue regarding the CGST liability of ZIPL, it is apparent that ZIPL's bank accounts could not be attached for any amount due and payable to the merchants using the ZIPL's platform. The provisions of Section 83 of the CGST Act can be invoked for attaching the assets and bank accounts of a taxable person or a person specified under Section 122(1A) of the CGST Act, if in the opinion of the Commissioner it is necessary to do so for the purpose of protecting the interest of government revenue. Thus, the bank accounts of ZIPL cannot be attached for securing the revenue of another taxable person. It is implicit that the bank accounts and assets of only those taxable person or persons specified in Section 122(1A) of the CGST Act can be attached who may be liable for payment of any government revenue and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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