M/S Vsc Tudi Joint Venture vs. Union Of INDIA

Held

The Court noted that the Order-in-Original dated December 22, 2025, had not been challenged. The revenue raised an objection that the foundational basis for the garnishee notice was not challenged. However, the learned Senior Counsel for the petitioners sought liberty to prefer an appeal against the Order-in-Original, citing some delay in filing. The Court, without commenting on the merits of the contentions raised by the parties, granted liberty to the petitioners to prefer an appeal within two weeks, along with a delay condonation application and statutory pre-deposit. The Court directed that no coercive steps would be taken against the petitioners pursuant to the impugned garnishee notice during this two-week period. The appellate authority was directed to consider the delay condonation application sympathetically. The writ petition was disposed of with this liberty.

Facts

The petitioners, M/s VSC Tudi Joint Venture and others, filed a writ petition challenging proceedings initiated by the Assistant Commissioner, Central Tax (GST) (Respondent No. 2). The impugned proceedings included a notice in FORM GST DRC-13 dated July 7, 2026, issued to the Federal Bank Ltd. (Respondent No. 4) demanding Rs. 1,77,55,278/- under Section 79(1)(c) of the CGST Act, 2017. The petitioners argued this demand was in excess of the adjudicated amount in Order-in-Original No. 90/2025-26(GST)/BHD dated December 22, 2025, and Form GST DRC-07 dated December 24, 2025. They also challenged a subsequent letter dated July 21, 2026, directing attachment/freezing of bank accounts. Additionally, they sought release of a differential GST component from Respondents No. 5 and 6.

Key Issues

1. Whether the garnishee notice dated July 7, 2026, issued under Section 79(1)(c) of the CGST Act, 2017, demanding Rs. 1,77,55,278/-, is illegal, arbitrary, without jurisdiction, and without authority of law, being in excess of the demand adjudicated vide Order-in-Original No. 90/2025-26(GST)/BHD dated December 22, 2025, and Form GST DRC-07 dated December 24, 2025. Petitioner's contention: The amount demanded in the garnishee notice is significantly higher than the amount adjudicated in the Order-in-Original. Revenue's contention: Not explicitly recorded, but the objection raised was that the foundational basis for the garnishee notice was not challenged in the writ petition. 2. Whether the communication dated July 21, 2026, directing attachment/freezing of bank accounts of the partners of the Joint Venture, invoking Section 79(1)(c) read with Section 90 of the CGST Act, 2017, is illegal, arbitrary, wholly without jurisdiction, and violative of principles of natural justice and constitutional provisions. Petitioner's contention: Similar to issue 1, the action is illegal and arbitrary. Revenue's contention: Not explicitly recorded.