Mujahar Ali Sarkar vs. The State Of Assam And 5 Ors

Facts

The petitioner, Mujahar Ali Sarkar, challenged a summary of show cause notice and a Form GST DRC-01 issued by the Assistant Commissioner of State Tax, Dhubri, demanding Rs. 58,45,431/- along with interest and penalty for the period April 2021 to August 2022. The petitioner also challenged the debit freeze of his bank account by Axis Bank, Dhubri, based on a communication from the Deputy Commissioner of State Tax, Dhubri. The petitioner sought liberty to approach the appropriate forum for the tax demand, and the court agreed to exclude the period spent in litigation from the limitation period. The revenue argued that the debit freeze was not under Section 83 of the AGST Act but was initiated to apprehend fraud and save public money.

Held

The Court did not enter into the merits of the challenge to the summary of show cause notice and Form GST DRC-01, granting the petitioner liberty to approach the appropriate forum. Regarding the debit freeze of the bank account, the Court held that such action, admittedly being without support of any prescribed provision of law, was without jurisdiction. The Court noted that while attachment can be carried out under Section 83 of the AGST Act, 2017, and there are provisions for appeal against such orders under Rule 159(5) of the Assam GST Rules, 2017, the debit freeze in this instance was not supported by any legal provision. Therefore, the debit freeze was interfered with. The Court made no comment on the validity of the subsequent exercise of power under Section 83, as it was not the subject matter of the present petition.

Key Issues

1. Whether the impugned summary of show cause notice and Form GST DRC-01, issued under Section 74 of the Assam Goods and Service Tax Act, are legally sustainable? (Petitioner's contention: The petitioner initially challenged these notices but sought liberty to approach the appropriate forum. Revenue's contention: Not recorded as the petitioner did not pursue this challenge). 2. Whether the debit freeze of the petitioner's bank account by the bank, pursuant to a communication from the Deputy Commissioner of State Tax, was without jurisdiction and without support of any prescribed provision of law? (Petitioner's contention: The debit freeze was wrongful. Revenue's contention: The debit freeze was not under Section 83 of the AGST Act but was initiated to apprehend fraud and save public money. The revenue also stated that appropriate procedure under Section 83 had been initiated).