Plea before Delhi HC on Issue of Communications to Suppliers of Assessee without Valid Provisional Attachment Order: GST Dept Ensures to be "More Careful" [Read Order]

In a plea before the Delhi High Court on the issue of communications to suppliers of assessee, Redamancy World without valid provisional attachment order and the GST Department ensured before the Delhi High Court to be "More Careful".

The petitioner has filed the present petition, inter alia, impugning a communication/order purportedly issued under Section 83 of the Central Goods & Service Tax Act, 2017. Admittedly, the said communication was not served on the petitioner. The petitioner became aware that its bank account was directed to be frozen by a communication from a letter, issued by Canara Bank.

The petitioner also impugned the communication sent to various customers of the petitioner directing them not to make payments for the goods supplied by the petitioner. The petitioner has also filed a communication sent by the respondent (DGGSTI) addressed to M/s Radha Krishan Industries, directing the said entity not to release the payments of the petitioner, which were due as consideration for the raw material purchased by them, from the petitioner.

The counsel who appeared for the respondents submitted that the letter addressed to various customers of the petitioner was withdrawn, and the same was also communicated to the customers of the petitioner. He further submits that the competent authority has by a letter requested the Chandigarh Unit to allow the petitioner’s customers to make payment directly into the petitioner’s bank account.

A Division Bench comprising Justices Vibhu Bakhru and Amit Mahajan observed that “We do not find that there is any specific noting in the files, to the effect that such an action is necessary in the facts of the present case. Although, the files produced today indicate that there are allegations of wrongful availment of Input Tax Credit by the petitioner and the respondent authorities are also investigating the chain of suppliers; there is no order passed by the Commissioner recording his satisfaction that orders of provisional attachment are necessary to safeguard the interests of Revenue.”

Satish Aggarwala, counsel who appeared for the respondents assured before the Delhi High Court that respondents will be more careful in future in ensuring that orders such as attachment of the bank accounts or assets is issued strictly in accordance with the provisions of the CGST Act.

To Read the full text of the Order CLICK HERE

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