Judgment
WA No.1250 of 2023 1 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR & THE HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P.
TUESDAY, THE 25TH DAY OF JULY 2023 / 3RD SRAVANA, 1945 WA NO. 1250 OF 2023 AGAINST THE ORDER/JUDGMENT in WP(C) 12519/2023 OF HIGH COURT OF KERALA APPELLANT/PETITIONER:
M/S S.R TRADERS, A PARTNERSHIP FIRM FORMED AND REGISTERED UNDER THE INDIAN PARTNERSHIP ACT, 1931, HAVING ITS REGISTERED OFFICE, AT 222/1, KULAPPULLY ROAD, KAYILIAD, PALAKKAD REPRESENTED BY ITS MANAGING PARTNER SAFEEK K., PIN - 679122 BY ADVS.
ASWIN GOPAKUMAR ADITYA VENUGOPALAN NIKITHA SUSAN PAULSON MAHESH CHANDRAN AVINASH KURUNGOT SHALLET K. SAM JIKKU SEBAN GEORGE(K/905/2011) DEEPTI SUSAN GEORGE(K/000946/2011) RESPONDENTS:
1 THE ADDITIONAL DIRECTOR GENERAL, DIRECTORATE GENERAL OF GST INTELLIGENCE, KOCHI ZONAL UNIT, CENTRAL EXCISE BHAVAN, KATHRIKADAVU, KALOOR P.O., KOCHI, PIN - 682017
WA No.1250 of 2023 2 2 THE STATE TAX OFFICER, SQUAD NO.VI, OFFICE OF THE DEPUTY COMMISSIONER OF STATE TAX (INTELLIGENCE), STATE GOODS AND SERVICES TAX DEPARTMENT, PALAKKAD, PIN – 678001 SMT.M.M.JAMINE, GP SRI.SREELAL N WARRIER, SC THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 25.07.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WA No.1250 of 2023 3 A.K. JAYASANKARAN NAMBIAR & MOHAMMED NIAS C.P., JJ …...................................................
WA No.1250 of 2023 …..............................................................
Dated this the 25th day of July, 2023 JUDGMENT A.K.Jayasankaran Nambiar.J This writ appeal is preferred against the judgment dated 9.6.2023 of a learned single Judge in WP(C)No.12591 of 2023. In the writ petition that was preferred by the appellant herein, the orders that provisionally attached immovable properties and the bank accounts of the appellant were impugned inter alia on the contention that the said orders were passed without application of mind and in flagrant violation of the certain provisions of law under the Central Goods and Service Tax Act and Rules.
The learned single Judge after considering the contentions of the appellant found that Ext.P6 orders were passed by the first respondent who was legally empowered to pass such orders and further that the appellant had an effective alternate remedy to impugn the said orders before the appellate authority under the Act. The writ petition was dismissed mainly on the finding that there was an efficacious alternate remedy that the appellant could pursue against the orders impugned.
WA No.1250 of 2023 4 2.
When this appeal came up for admission before us, we took note of the contention of the learned counsel for the appellant Sri.Aswin Gopakumar that if all the bank accounts pertaining to the appellant and its partners are attached by the respondents then it would be impossible for them to carry on their business during the pendency of the investigation, that is said to be underway at the instance of the respondents. It was also pointed out that at any rate since the immovable properties of the appellant have already been provisionally attached by the respondents the same would offer sufficient security to protect the interests of the revenue pending the adjudication of the show cause notices issued to the appellant, as also pending further investigation to be carried out by the respondents.
3. Per contra, it was the submission of the learned standing counsel for the respondents, Sri.Sreelal N.Warrier that the show cause notice issued to the appellant presently quantifies the demand at a figure of Rs.8.59 crores and one has also to factor in a possible liability towards penalty once the adjudication proceedings are over. It is also his submission that the investigation that is ongoing against into the activities of the appellant would also likely result in further show cause notices being issued and further liabilities being fastened on the appellant firm and its partners. He therefore submits that there is no warrant for interfering with the judgment of the learned single Judge.
WA No.1250 of 2023 5 4.
On a consideration of the rival submission, we find that while it may be a fact that the value of the immovable properties attached is not sufficient to meet the demand contained in the show cause notices, we must necessarily remind ourselves that the appellant cannot be financially choked to the extent of preventing it from carrying on legitimate business activities while simultaneously defending the proceedings initiated by the respondents against him. We feel therefore that the ends of justice would require us to modify the judgment of the learned single Judge and permit the appellant to operate two of its bank account pending finalisation of the adjudication proceedings by the respondents so that the appellant can carry on its legitimate business activities even while defending the proceedings initiated against him by the respondents. Accordingly, we direct a lifting of the attachment in respect of the following two accounts pertaining to the appellant, and covered by Ext.P6 order that was impugned in this writ petition.
(1) A/c.No.50200027207947, HDFE Bank, Pattambi - savings account in the name of Safeek.K and (2) A/c.No.14120100032507, Federal Bank-PTB – savings account in the name of Ali.K.M.
5. The appellant shall be permitted to operate the aforesaid accounts during the pendency of the adjudication proceedings initiated at the instance of the respondents and until the culmination thereof. Save for the
WA No.1250 of 2023 6 above limited modification, we refrain from interfering with the judgment of the learned single Judge in all other respects.
The writ appeal is thus closed as above.
Sd/- A.K. JAYASANKARAN NAMBIAR, JUDGE Sd/-MOHAMMED NIAS C.P., JUDGE dlk 25.7.2023
WA No.1250 of 2023 7 APPENDIX OF WA 1250/2023 PETITIONER'S ANNEXURES Annexure A1 SHOW CAUSE NOTICE UNDER SECTION 74(1) OF THE CGST AND KERALA GST ACT DATED 27.05.2022 Annexure A2 SHOW CAUSE NOTICE FOR CANCELLATION OF REGISTRATION UNDER SECTION 29(2)(A) READ WITH RULE 21(E) OF THE CGST/SGST ACT 2017 DATED 28.09.2022 Annexure A3 SHOW CAUSE NOTICE DATED 04.05.2023 ISSUED BY THE DIRECTORATE GENERAL OF GST INTELLIGENCE VIDE SCN NO. 03/2023-23(GST)