The Calcutta High Court has held that the cash-credit facility is not a debt, and cannot provisionally attach u/s 83 of the Central Goods and Service Tax Act, 2017.
J. L. Enterprises, the petitioner is a partnership firm. On 4th March 2023, State Tax Department Officers visited the registered office of the said firm and inspected the books on accounts and verified records under Section 67 of WBGST Act and issued INS-01 form
It was submitted that in the case of Jugal Kishore Das Vs. Union of India reported in 2013 SCC Online Cal 19941 that the cash-credit limit is a facility provided by the bank to its customers to use and utilise the money and if such facility is availed of, it would attract the interest to be charged for the same so utilised. It is further held that the cash-credit facility is not a debt to be attached by the respondent authority.
Cash-credit facility is also a bank account issued by the bank in favour of the petitioner wherefrom the petitioner is using a credit facility for his business. It was found from the record of the case that even the petitioner has been paying GST from the said cash-credit account.
It was observed that the court in its precedents had held that a cash-credit facility is not a debt and therefore, it cannot be made attachable.
Further the respondent contended that where there is an efficacious and speedy remedy in the statute, such remedy cannot be bypassed and no relief should be granted to the petitioner in this regard under Article 226 of the Constitution of India.
The issue as to whether relief under writ jurisdiction should be granted in a case where there is an alternative statutory remedy was called upon for determination before the Hon’ble Supreme Court about Section 13 and Section 17 of the SARFAESI Act.
Subsection 5 of Section 159 gives adequate power to the petitioner to file an objection for releasing the bank account or, in the instant case cash-credit facility.
“When there is efficacious relief in the statute itself, this Court is of the view that the petitioner should adopt such efficacious relief and this Court is not inclined to afford any relief under Article 226 of the Constitution,” Justice Bibek Chaudhuri held.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
