No SCN Issued for in GST Fraud Case: Delhi HC allows to Operate Attached Bank A/c with Minimum Balance of Rs. 50L [Read Order]

The Delhi High Court allowed the attached bank account to operate with a minimum balance of Rs. 50 lakhs in a matter of GST fraud with an intention to protect revenue and also parallely to support business operations of the petitioner.

In this case of GST fraud, Justices Prathiba M. Singh and Shail Jain noted that no show cause notice was issued and the evaded tax amount was also not quantified.

SL Golden Paptech Pvt Limited filed a writ petition before the high court challenging the impugned provisional attachment of the bank account and also some attached properties.

The counter affidavit filed by the GST department claims that the total liability of the Petitioner, including the tax penalty and interest is to the tune of Rs.17.92 crores which includes Rs.8.96 crores of tax and matching penalty of Rs.8.96 crores @ 15% p.a.

In addition, the department submitted the matter is of GST evasion. When the search was conducted at the petitioner’s premises, the department asserted that data related to three financial years that is from 2020 to 2023 was not found. Therefore, the evasion amount could be much larger.

The Petitioner’s counsels Adv. Chinmaya Seth, Adv. A.K.Seth & Adv. Palak Mathur, however, submitted that a sum of Rs.2 crores has already been deposited

which would constitute almost 25% of the tax liability amount of Rs.8.96 crores.

It was also submitted that the properties were included. The counsel representing the petitioner stated that the amount in the petitioner's attached bank account is nearly Rs. 1.2 crores.

Both parties were heard by the bench. The bench permitted the petitioner to run the attached bank account with a minimum balance of Rs. 50 lakhs,considering the plea that since SCN was not given, the amount was not quantified, and properties were attached, the petitioner had already deposited Rs. 2 crores.

Adv. Harpreet Singh, SSC, CBIC with Adv. Suhani Mathur & Adv. Jatin Gaur appeared for the department.

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