Assessee's Business Cannot Be Prejudiced By Complete Attachment Of Bank Accounts Pending Adjudication By GST Authority: Delhi HC

The Delhi High Court has asked the GST authority not to prejudice the business of an assessee, involved in manufacturing of mild steel products, by attaching its complete bank account pending adjudication of ₹15.09 crores tax evasion proceedings.A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta noted that one year had elapsed since the provisional attachment order was passed but no show cause notice was issued. It also noted that in any case the entire amount alleged would not be payable immediately and thus, “the Petitioner's business cannot be prejudiced by complete attachment of bank accounts.”Petitioner had assailed the provisional attachment of its bank account, stated to be having a balance of approximately ₹2.75 crores.As per factual matrix of the case, an investigation was conducted at the Petitioner's premises where officials of the Directorate General of Goods and Services Tax Intelligence allegedly found excess stock when tallied with books maintained by the Company.As such, DGGI proposed to initiate action against the Petitioner under Section 67 of the Central Goods and Services Tax 2017, and meanwhile ordered confiscation of goods and provisionally attached Petitioner's bank account.In its plea seeking release of the bank account, the Petitioner submitted that a substantial amount of more than Rs.100 crores as GST and Rs.4.06 crores as Income tax has been paid by it in the last three financial years.So far as the confiscation is concerned, it submitted that the assessment of tax evasion was done merely on the basis of an eye estimation by DGGI. Further, no proceedings were initiated against it till date.Respondents on the other hand submitted that DGGI is in the process of issuing show cause notice shortly and in any case, the Department has a time period of three years to issue the SCN.The High Court noted that a period of more than 16 months had lapsed since the issuance of the Panchnama and one year has elapsed since the passing of the provisional attachment order. Considering the time period and the financial position of the Petitioner, the Court said,“The Petitioner is a running concern and as per the accounts which have been placed on record, it is conducting business and paying substantial amounts of taxes…Under such circumstances, it would be sufficient at this stage, if 10% of the amount can be secured by way of minimum balance in the bank account of the Petitioner.”Court thus permitted the Petitioner to operate its bank account but directed it to maintain a minimum credit balance of Rs.1.5 crores.Appearance: Mr. R.P. Singh, Mr. Rahul Ranjan, Mr. Anant Vijay & Mr. Nirmal Dixit, Advs for Petitioner; Mr. Atul Tripathi, SSC with Mr. Shubham Mishra, Adv for RespondentCase title: M/S Brijbihari Concast Pvt. Ltd. (Through Its Director Sh. Rajeev Agarwal) v. Directorate General Of Goods And Services Tax Intelligence Meerurt Zonal Unit (Through Its Additional Director General) & Anr.Citation: 2025 LiveLaw (Del) 477Case no.: W.P.(C) 8433/2024Click here to read order

Assessee's Business Cannot Be Prejudiced By Complete Attachment Of Bank Accounts Pending Adjudication By GST Authority: Delhi HC

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