Chhattisgarh HC Directs GST Department to Release Frozen Bank Account of Small Entrepreneur [Read Order]

The Chhattisgarh High Court at Bilaspur directed the GST authorities to release a taxpayer’s frozen bank account, while allowing the petitioner, Archana Mishra, trading as Shree Agro Tech, liberty to pursue the statutory appellate remedy against the GST demand raised through ex-parte orders.

The bench while considering the writ petition filed by the taxpayer’s authorized representative, acknowledged that although the petitioner had a statutory remedy of appeal, the urgent financial distress and medical condition of the taxpayer warranted interim relief.

The case arose from two ex-parte orders passed by GST authorities an order dated 31.08.2023 by the Assistant Commissioner, Central GST & Central Excise, and an order dated 25.12.2023 by the Superintendent, Central GST & Central Excise.

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These orders created a tax, interest, and penalty demand for the financial year 2017-18. Acting upon these orders, the GST Department issued a letter dated 08.01.2025 to Canara Bank, directing it to freeze the petitioner’s account and hold ₹6,72,000/-. The petitioner contended that the orders were passed without proper hearing and that the funds were urgently required for her medical treatment.

Appearing through her authorized representative the petitioner argued that she was a small entrepreneur operating under the trade name “Shree Agro Tech” and had suffered due to these sudden coercive actions. It was submitted that the impugned GST orders were passed without granting her an opportunity of hearing, rendering them violative of natural justice.

The freeze on her bank account had crippled her small business and left her unable to meet urgent medical expenses. She sought immediate relief from the Court to set aside the orders and release the frozen funds.

Appearing for the GST Department, the department representative argued that the petitioner had an efficacious alternative remedy of appeal, as prescribed under the CGST Act. She submitted that without exhausting the statutory appellate process, the petitioner’s writ petition was premature and not maintainable.

The counsel submitted that the Court should refrain from interfering in a tax dispute at the writ stage where the Act itself provides a complete appellate mechanism.

The bench consisting of Justice Deepak Kumar Tiwari, recorded the petitioner’s willingness to file an appeal but also acknowledged the urgent financial need. As a result the Court disposed of the writ petition with directions such as that the petitioner was granted liberty to file a statutory appeal within 30 days from the date of the order.

The appellate authority was directed not to insist on limitation, meaning the appeal would be entertained on merits despite the delay. While the Court did not expressly set aside the GST orders, it observed that the petitioner’s financial distress and health situation required immediate relief.

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