The Kerala High Court has stayed the DGGI order directing the petitioner to furnish a Bank guarantee for 30 Crores as a condition for the lifting of provisional attachment of bank account under section 83 of CGST Act.
The petitioner, Kerala Communicators Cable Limited has challenged the orders of attachment of its bank accounts under Section 83 of the CGST Act. By way of interim relief, the petitioner has prayed for directing the respondent to release the bank guarantee furnished and for discharge of the bond executed.
The Search and inspection under Section 67 of the CGST Act was conducted at the premises of the petitioner. It has resulted in provisional attachment of bank accounts of the petitioner.
The petitioner had challenged the attachment of his bank accounts pursuant to the powers conferred by Section 83 of the CGST Act. During pendency of the said writ petition, by order, the respondent had modified the provisional attachment of bank accounts by imposing the various conditions.
The petitioner submitted that if the adjudication goes against the petitioner, then the petitioner can prefer an appeal under Section 107 of the Act and only 10% of the disputed amount can be pre-deposited for filing such appeal and the demand is deemed to be stayed by deposit of this 10% of the disputed amount. The maximum deposit for filing such statutory appeal is only Rs.25 Crores. With this, it is submitted that directing the petitioner to furnish the bank guarantee of about thirty crores of rupees which was the credit balance in his account would seriously affect his business and is contrary to the provisions prescribed for adjudicating the demand which can be made in pursuant to the search effected under Section 67 of the CGST Act.
The single-judge bench of Justice A.M.Badar held that during the pendency of the petition, the impugned direction contained in Clause 2(a) requiring the petitioner to furnish security in the form of the bank guarantee has stayed and the petitioner is directed to furnish an undertaking before the Court by way of an affidavit that it shall not alienate any of its fixed assets, plant, property, and equipment shown in the balance sheet till disposal of the instant petition.
Advocates Shameem Ahamed and Cyriac Tom appeared for the petitioner.
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