BharatTaxGST

Sln Infra vs. Principal Commissioner Of Central Tax

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WP/22469/2024HC KarnatakaGSTCNR KAHC01048607202411 September 2024Bench: S.R.KRISHNA KUMAR9 pages
For Petitioner: SRI. T. SURYANARAYANA, SENIOR COUNSEL FOR SMT. TANMAYEE RAJKUMAR, ADVOCATEFor Respondent: SRI. JEEVAN J. NEERALGI, ADVOCATE

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Cause title — parties, addresses and appearances
- 1 - NC: 2024:KHC:37213 WP No. 22469 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF SEPTEMBER, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 22469 OF 2024 (T-RES) BETWEEN: SLN INFRA, A SOLE PROPRIETARY CONCERN, NO 6, 2ND FLOOR GANESH CHAMBERS, ABOVE CITY UNION BANK VIJAYA BANK COLONY, DODDA BANASWADI BENGALURU, KARNATAKA 560043 REPRESENTED HEREIN BY ITS PROPRIETOR, MR SRIDHAR GOUD …PETITIONER (BY SRI. T. SURYANARAYANA, SENIOR COUNSEL FOR SMT. TANMAYEE RAJKUMAR, ADVOCATE) AND: 1. PRINCIPAL COMMISSIONER OF CENTRAL TAX GST EAST COMMISSIONERATE, 6TH FLOOR BMTC, TTMC BUILDING, OLD AIRPORT ROAD, DOMLUR, BENGALURU 560071 2. JOINT COMMISSIONER OF CENTRAL TAX EAST DIVISION 4, GST EAST COMMISSIONERATE, 4TH FLOOR BMTC, TTMC BUILDING, OLD AIRPORT ROAD, DOMLUR BENGALURU 560071 Digitally signed by ANAND N Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:37213 WP No. 22469 of 2024 3. SUPERINTENDENT OF CENTRAL TAX GST EAST COMMISSIONERATE, 4TH FLOOR BMTC, TTMC BUILDING, OLD AIRPORT ROAD, DOMLUR BENGALURU 560071 4. UNION OF INDIA REPRESENTED HEREIN BY ITS SECRETARY, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI 110001 …RESPONDENTS (BY SRI. JEEVAN J. NEERALGI, ADVOCATE) THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER SEIZURE DATED 09/01/2024 IN FORM GST INS-02 AND ANNX- A ISSUED BY THE R3 (ANNX-E) UNDER SECTION 67 OF THE CGST ACT; QUASH THE

ORDER OF PROVISIONAL ATTACHMENT OF BANK ACCOUNT VIDE ORDERS IN FORM GST DRC-22 DATED 28/05/2024, ISSUED BY THE R1 (ANNX-L1, L2 AND L3), UNDER SECTION 83 OF THE CGST ACT.

THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER

In this petition, the petitioner seeks the following reliefs: "(i) Quashing the Order of Seizure dated 09.01.2024 in Form GST INS-02 and Annexure-A, issued by the 3rd NC: 2024:KHC:37213 Respondent (Annexure - E) under section 67 of the CGST Act; (ii) Quashing the order of provisional attachment of bank account vide orders in Form GST DRC-22 dated 28.05.2024, issued by the 1st Respondent (Annexure - L1, L2 and L3), under Section 83 of the CGST Act; (iii) Quashing the pre-show cause intimation dated 28.06.2024, in Form GST DRC-01A issued by the 2nd Respondent (Annexure - S2) under Section 74 of the CGST Act; (iv) Quashing the Show Cause Notice dated 02.08.2024 in Form GST DRC-01, issued by the 2nd Respondent (Annexure - V) under Section 74 of the CGST Act."

2.

Heard the learned Senior counsel for the petitioner and learned counsel for the respondents and perused the material on record.

3.

A perusal of the material on record will indicate that on 09.01.2024, the respondent No.3 conducted a search in the petitioner's Bangalore office by invoking Section 67(2) of the CGST Act, 2017 pursuant to which, the summons were issued to the proprietor of the petitioner, who submitted a letter on 06.02.2024 NC: 2024:KHC:37213 requesting release of original documents which were required for the purpose of business of the petitioner. On 28.05.2024, the respondent No.1 had provisionally attached the bank account of the petitioner to the Punjab National Bank, IDBI Bank and Federal Bank to which the petitioner submitted objections pursuant to which, the respondent No.2 issued a pre-show cause notice intimation on 21.06.2024 calling upon the petitioner to discharge tax in a sum of Rs.5,10,47,405/-. The petitioner having submitted a response/reply dated 27.06.2024, the respondent No.2 issued one more letter dated 28.06.2024 to which also the petitioner submitted its response reiterating its earlier contentions and ultimately culminating in the show cause notice dated 02.08.2024 issued by the respondent No.

2.

Aggrieved by the impugned seizure dated 09.01.2024, the impugned bank attachment order dated 28.05.2024, the pre-show cause notice intimation dated 28.06.2024 and the show cause notice dated 02.08.2024, the petitioner is before this Court by way of the present petition.

4.

In addition to reiterating the various contentions urged in the present petition and referring to the material on record, the learned Senior counsel for the petitioner invited my attention to the NC: 2024:KHC:37213 impugned order of seizure in order to point out that the documents, records etc., belonging to the petitioner having been seized as long back as on 09.01.2024, the respondents have already taken necessary steps to quantify the alleged liability of the petitioner by issuing a pre-show cause notice intimation as well as the show cause notice based on the aforesaid documents and consequently, the respondents would not require the said documents any longer and the same are to be returned to the petitioner for the purpose of enabling it to carry on his business. It is also submitted that the order of seizure has spent/exhausted itself by issuance a pre-show cause notice intimation and the show cause notice and consequently, necessary directions have to be issued to the respondents to return the original papers, documents etc., back to the petitioner, which was seized by them

5.

Learned Senior counsel would also submit that out of the aforesaid demand of Rs.5,10,47,405/-, the petitioner had also discharged a sum of Rs.3,60,00,000/- by making payments in the States of Karnataka and Telangana and the respondents are not entitled to demand the very same amount by way of the impugned pre-show cause notice intimation and the impugned show cause NC: 2024:KHC:37213 notice. It is therefore submitted that the provisional attachment of the bank accounts of the petitioner also deserve to be quashed.

6.

Per contra, learned counsel for the respondents would oppose the petition and submits that there is merit in the petition and the same is liable to be dismissed.

7.

A perusal of the material on record including the impugned order of seizure at Annexure-E dated 09.01.2024 would indicate that the same has exhausted/spent itself by issuance of a pre-intimation show cause notice and the show cause notice which were based on the aforesaid seizure order, including the documents seized by the respondents. In other words, upon issuance of the pre-show cause notice intimation and the show cause notice which was based upon the records, papers, documents etc., seized by the respondents, the same would not be required any longer and reliance placed on the said documents would not subsist any longer and the respondents are to be directed to return back the said documents, especially when the petitioner is into real estate business and the documents are required for the purpose of its business. Under these circumstances, though the order of seizure dated 09.01.2024 does NC: 2024:KHC:37213 not require to be interfered with in the light of the issuance of the pre-show cause notice intimation and the show cause notice issued by the respondents, suffice it to state that direction are to be issued to the respondents to return back all the documents seized by them vide Annexure-E dated 09.01.2024. 8. Insofar as the impugned provisional bank attachment orders at Annexures-L1, L2 and L3 dated 28.05.2024 are concerned, in the light of the specific contention of the petitioner that out of the total alleged liability of Rs.5,10,47,405/-, the petitioner has only discharged Rs.3,60,00,000/- in the States of Karnataka and Telangana coupled with the interim order passed by this Court on 21.08.2024 staying the attachment of bank accounts, without prejudice to the rights of the respondents to proceed further after taking appropriate decision in pursuance of the show cause notice, I deem it just and appropriate to set aside the provisional bank attachment order reserving liberty in favour of the respondents to proceed in this regard.

9.

In the result, the following: NC: 2024:KHC:37213 ORDER A. The petition is hereby party allowed. B. Insofar as the show cause notice dated 02.08.2024 issued by the respondent No.2 is concerned, the petitioner is directed to submit a reply to the show cause notice to the direction to the respondent No.2 to proceed further and provide sufficient and reasonable opportunity and hear the petitioner and pass appropriate orders in accordance with law. C. The impugned provisional attachment of bank account at Annexures -L1, L2 and L3 dated 28.05.2024 are hereby quashed. D. The petitioner is directed to submit a reply to the show cause notice at Annexure - V dated 02.08.2024 within a period of three [3] weeks from today. E. The respondents shall notify the petitioner about its date of appearance and provide sufficient NC: 2024:KHC:37213 and reasonable opportunity to the petitioner and proceed further in accordance with law. F. The respondents are directed to return back all the seized documents, records, papers, deeds etc., back to the petitioner forthwith immediately upon receipt of a copy of this order. (S.R.KRISHNA KUMAR) JUDGE

RB

Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.