POWER OF ATTACHMENT OF BANK ACCOUNT CAN’T BE USED AS A TOOL TO HARASS ASSESSEE: HC

Articles

POWER OF ATTACHMENT OF BANK ACCOUNT CAN’T BE USED AS A TOOL TO HARASS ASSESSEE: HC

15/02/2023

POWER OF ATTACHMENT OF BANK ACCOUNT CAN’T BE USED AS A TOOL TO HARASS ASSESSEE: HC

The petitioner is a private limited company engaged in the business of trading in coal. It is also having valid registration number under the Act. During the period between 2018-19, the petitioner company had purchased Iron and Steel Waste Scrap from M/s. Arsh Enterprise, which has having valid GST registration at the time of purchase of goods. The goods worth Rs.37,31,420/- had been purchased where the value of goods was of Rs.31,53,746/- and the GST was Rs.5,67,674/-. The goods purchased from M/s. Arsh Enterprise also had been sold by the petitioner to various other purchasers and the sale proceeds were received in his Bank account. The GST registration of M/s. Arsh Enterprise had been cancelled on 31.10.2020. On 04.01.2022 summons under section 70 of the Act was issued to the petitioner where he was called upon by the respondent No.2 to remain present for recording of statement and production of sales and purchase registers. The summons is silent regarding specific subject matter about the inquiry. It is averred by the petitioner that respondent No.2 had taken extreme coercive steps, whereby his entire business came to a grinding halt by attaching the Bank account without any pending proceedings. With communication on 18.05.2022, FORM GST DRC-22 was issued on the Bank under section 83 of the Act. According to the respondent, the petitioner had purchased the goods from M/s. Arsh Enterprise as per its returns filed for the year 2018-19 and 2019-20. Directorate General of Goods and Service Tax Intelligence, Surat Zonal Unit, had gathered the intelligence that M/s. Arsh Enterprise having its place of business at Surat was involved in wrongfully availed and utilizing the Input Tax Credit without any actual receipt or supply of goods. Hence, the search was conducted at the office premises of M/s. Arsh Enterprise and relevant documents were seized. Summons came to be issued to the present petitioner in exercise of the powers delegated under section 70(1) of the CGST Act to appear in person for giving statement and producing the sales and purchase registered and also on 10.03.2022 he was asked to produce the freehold property of the company or of the Directors. On 11.04.2022, the correspondence shows that there had been no freehold property in India or abroad of the company or the Director. The details had been furnished of the Bank. The Manager, Kotak Mahindra Bank had been communicated vide dated 18.05.2022 in FORM GST DRC-21 by provisionally attaching the Bank account under Section 83 of the petitioner. Present petition is allowed.

READ JUDGEMENT