The Allahabad High Court allowed the company to contest the DGGI’s bank account attachment under Section 83 of the GST Act granting a two – week time to file the objections, where it was alleged that department only served the Form GST DRC-22 to the bank and not to the assessee.
The assessee, M/S Siddha Mahajan Pvt.Ltd, registered with the GST Department under the provisions of U.P. G.S.T. Act, 2017 filed writ petition challenging the attachment of the bank account stopping the assessee to debit from the account of the Company or other accounts operated by the petitioner company on the same PAN and the Cash Credit Account.
The counsel of the assessee, Mukesh Kumar Tewari submitted that the assessee has availed cash credit facility under the Maha Krishi Smriddhi Yojana from the Bank of Maharashtra on 18.12.2023 and the assessee was maintaining the Cash Credit Account. Thus, the assessee could not debit the money from the account due the attachment.
It was contended that the order dated 08.04.2024 violates Section 159 of the CGST Rules. It was argued that Form GST DRC-22 was sent only to the respondent bank, not to the petitioner as required by Section 159(2) of the CGST Rules, 2017.
Furthermore, it was stated that had the petitioner received a copy of the order under Section 159(2), they would have raised objections and sought remedies, which could have been adjudicated under Rule 159(5).
The petitioner’s counsel argued that the challenged GST order lacks jurisdiction as it was issued by the Principal Additional Director General, DGGI, Lucknow Zonal Unit under Rule 159 of the CGST Rules, 2017, instead of by the Commissioner, as required.
In contrast, the respondents opposed the writ petition, stating that multiple notices were issued to the petitioner, who failed to respond. Consequently, the petitioner’s account was attached through the challenged order.
It has been argued that under the GST Act, authorities are defined in Section 3, where Section 3(d) equates the Additional Director General to the Commissioner. It is asserted that the impugned order is legally sound and devoid of any irregularity.
The High Court bench of Justices Arun Kumar Singh Deshwal and Alok Mathur noted that the counsel received a copy of order dated 08.03.2024 from respondent no. 4 and permitted to file objections which may be decided in terms of Rule 159(5) of the GST Rules.
The writ petition was disposed of granting liberty to the petitioner to file objections to order dated 08.03.2024 within next two weeks. It was also clarified that in case objections of the petitioner are favourably considered, appropriate orders shall be passed for release of the attached bank account.
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