Sanjiv Ved Malik vs. State Of Maharashtra And Anr

Facts

The petitioner, Sanjiv Ved Malik, a partner in the firm Darshan Sagar Developers, challenged the attachment of his three bank accounts by the State of Maharashtra under Section 79(1)(c)(i) of the Maharashtra Goods and Services Tax Act, 2017 (MGST Act). The attachment notice was issued on December 2, 2022. While two accounts (HDFC and State Bank of India) were permitted to be operated, one account in Andhra Bank remained attached. The Revenue stated that a show cause notice dated June 13, 2022, was issued to the partnership firm for the period April 2018 to March 2019, which was not replied to. Consequently, an order dated August 18, 2022, determined a tax demand of Rs. 10,895,158/-, interest of Rs. 11,360,018/- under Section 50, and penalty of Rs. 1,089,516/- under Section 73(9), totaling Rs. 23,344,692/-. This demand was communicated to the petitioner via Form GST DRC-07 dated August 18, 2022.

Held

The Court held that the petitioner's grievance regarding the attachment of his bank accounts stems from an adjudication order and demand notice issued under Section 73 of the MGST Act. The Court was of the clear opinion that the petitioner, as a partner aggrieved by the adjudication order and/or demand, needs to pursue the remedies available in law. Therefore, the writ petition was disposed of, keeping open all contentions of both the petitioner and the respondents. The attachment of the third bank account was made subject to further orders that might be passed in any proceedings initiated by the petitioner. The Court did not decide on the merits of the underlying demand or the validity of the attachment itself, but rather directed the petitioner to avail appropriate statutory remedies.

Key Issues

1. Whether the petitioner, as a partner of the firm Darshan Sagar Developers, has a valid grievance against the attachment of his bank accounts when the underlying demand arises from an adjudication order passed under Section 73 of the MGST Act due to non-response to a show cause notice. Petitioner's contention: The petitioner's primary grievance is the attachment of his bank accounts. The specific details of the underlying demand and the show cause notice are not elaborated upon by the petitioner in the provided text, beyond stating the fact of attachment and the amount of the demand. Revenue's contention: The Revenue argued that a show cause notice was issued to the partnership firm and its partner (the petitioner) for the period April 2018 to March 2019. As there was no reply, an order under Section 73 of the MGST Act was passed, determining a significant tax, interest, and penalty demand. The attachment of bank accounts is a consequence of this unaddressed demand. The Revenue contended that the petitioner's remedy lies in challenging the adjudication order itself through the available statutory remedies, rather than directly challenging the attachment in a writ petition.