M/S Sri Om Traders vs. Principal Additional Director General - Karnataka High Court, 07 June 2023

Cause title — parties, addresses and appearances

- 1 - NC: 2023:KHC:19561 WP No. 12915 of 2020 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF JUNE, 2023 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 12915 OF 2020 (T-RES) BETWEEN: 1. M/S SRI OM TRADERS HAVING ITS OFFICE AT: GSKM ROAD, PANCHAVATI COLONY, SHIVAMOGGA - 577 202, REPRESENTED BY PROPRIETOR … PETITIONER (BY SMT. LEKHA G.D., ADVOCATE) AND: 1. PRINCIPAL ADDITIONAL DIRECTOR GENERAL OF GST INTELLIGENCE OFFICER DGCI, BANGALORE ZONAL UNIT, NO.112, "S P ENCLAVE", ADJACENT TO KARNATAKA BANK, K H ROAD, BENGALURU - 560 043 2. COMMERCIAL TAX OFFICER (ENFORCEMENT-3), VANIJYA TERIGE BHAVANA, GOPALA GOWDA EXTN, SHIVAMOGGA - 577 205 3. AXIS BANK HAVING ITS OFFICE AT: Digitally signed by VIJAYA P Location: High Court of Karnataka - 2 - NC: 2023:KHC:19561 WP No. 12915 of 2020 G R PRABHU ARCADE, 1ST CROSS, JPN ROAD, SHIVAMOGGA BRANCH - 577 201, REPRESENTED BY ITS MANAGER 4. FEDERAL BANK HAVING ITS OFFICE AT: HARANAHALLI MANJAPPA COMPLEX, PARK EXTENSION ROAD, DURGIGUDI, SHIVAMOGGA BRANCH - 577 201, REPRESENTED BY ITS MANAGER 5. SOUTH INDIAN BANK HAVING ITS OFFICE AT 1ST FLOOR, KARNATAKA SANGHA COMPLEX, BENGALURU-HONNAVAR ROAD, SHIVAMOGGA - 577 201, REPRESENTED BY ITS MANAGER 6. UNION BANK HAVING ITS OFFICE AT B H ROAD, NEAR MAYLARILINGESHWARA TEMPLE, SHIVAMOGGA - 577 201, REPRESENTED BY ITS MANAGER 7. BANK OF BARODA HAVING ITS OFFICE AT: PATIL BUILDING, NEAR ASHOK CIRCLE, B H ROAD, SHIVAMOGGA - 577 201, REPRESENTED BY ITS MANAGER 8. CITY COOPERATIVE BANK LIMITED HAVING ITS OFFICE AT - 3 - NC: 2023:KHC:19561 WP No. 12915 of 2020 MARIKAMBA TEMPLE NEAR KOTTE ROAD, SHIVAMOGGA - 577 201, REPRESENTED BY ITS MANAGER 9. M/S ARIHANT TRADERS MILKAT NO.01-328, PRIYANKANAGARI WAGHOLI, MAHARASHTRA - 412 207, REPRESENTED BY ITS PROPRIETOR 10. MR. RATNESH J SHAH PARTNER OF M/S PREYANSH METAL INDUSTRIES LLP PLOT NO.2, SURVEY NO.144/1, HARI OM INDUSTRIAL ESTATE, PIJ ROAD, TUNNEL, NADIAD, KHEDA GUJARAT - 387 230 11. M/S V A ASSOCIATES NO.13, SOMPRA 1ST STAGE, KIADB INDUSTRIAL AREA, PEMMANAHALLI, SOMPURA HOBLI, NELAMANGALA TALUK, BENGALURU - 562 111, REPRESENTED BY PROPRIETOR … RESPONDENTS (BY SRI. K. HEMA KUMAR, AGA FOR R1 & R2; NOTICE TO R3 TO R11 IS DISPENSED WITH) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO SET ASIDE THE IMPUGNED PROVISIONAL ATTACHMENT OF BANK ACCOUNT NO.919020002848618 OF THE PETITIONER MAINTAINED WITH THE R-3 VIDE IMPUGNED ORDER DTD.14.2.2020 PASSED BY THE R-1 UNDER SECTION 83 OF CGST ACT AS PER ANNEXURE-A AND ETC. - 4 - NC: 2023:KHC:19561 WP No. 12915 of 2020 THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

ORDER Petitioner has called in question the correctness of the orders of provisional attachment. The prayer sought for reads as follows: "A. Set aside the impugned provisional attachment of bank account No. 919020002848618 of the Petitioner maintained with the 3rd Respondent vide impugned order bearing No. DGCEI F.NO. Va157/2019/DGGI/BZU/ in DIN: 202002DSS000004GA226 dated 14.02.2020 passed by the 1st Respondent under Section 83 of CGST Act as per Annexure - A by issuing a Writ of Certiorari or any other order or writ in the nature of a Writ of Certiorari and B. Set aside the impugned provisional attachment of bank account No. 15900200002107 of the Petitioner maintained with the 4th Respondent vide impugned Order bearing No. DGCEIF.NO.Va/157/2019/DGGI/BZU in DIN: 202002DSS000006WE2C1 dated 14.02.2020 passed by the 1st Respondent under Section 83 of CGST Act as per Annexure- A1 by issuing a Writ of Certiorari or any other order or writ in the nature of a Writ of Certiorari and C. Set aside the impugned provisional attachment of bank account No. 0125073000001297 of the Petitioner maintained with the 5th Respondent vide impugned order bearing No. DGCEiF.NO. Va157/2019/DGGI/BZU/2608/2020 in DIN202003DSS00000552A98 dated 13.03.2020 passed by the 1st Respondent under Section 83 of NC: 2023:KHC:19561 CGST Act as per Annexure-A2 by issuing a Writ of Certiorari or any other order or writ in the nature of a Writ of Certiorari and D. Set aside the impugned provisional attachment of bank account No. 919020002848618 of the Petitioner maintained with the 3rd Respondent vide impugned order bearing No. Ref No. CTO (Enf-3)/smg/2019-20 dated 27.02.2020 passed by the 2nd Respondent under Section 83 of CGST/KGST Act as per Annexure - A3 by issuing a Writ of Certiorari or any other order or writ in the nature of a Writ of Certiorari and E. Set aside the impugned provisional attachment of trade debts of the Petitioner in respect of 9th Respondent vide impugned order dated 6.3.2020 bearing No. DGCEI F.NO. Va/157/2019/DGGI BZU in DIN N: 202003DSS000002AEF34 passed by the 1st Respondent under Section 83 of CGST Act as per Annexure - A4 by issuing a Writ of Certiorari or any other order or writ in the nature of a Writ of Certiorari and F. Set aside the impugned provisional attachment of trade debts of the Petitioner in respect of 10th Respondent vide impugned attachment dated 18.9.2020 bearing No. F.NO. Va/157/2019/DGGI/BZU/6174/2020 in DIN N: 202009DSS000000IF641 passed by the 1st Respondent under Section 83 of CGST Act as per Annexure A5 by issuing a Writ of Certiorari or any other order or writ in the nature of a Writ of Certiorari and G. Direct the 1st Respondent to withdraw the provisional attachment of debts payable by 11th Respondent to the Petitioner, as submitted by the Petitioner in its representation dated 5.10.2020 to the 1st Respondent as per Annexure-B by issuing a Writ of Mandamus or any other order or writ in the nature of a Writ of Mandamus NC: 2023:KHC:19561 H. Direct the 1st Respondent to withdraw the provisional attachment of bank account maintained by the Petitioner with the 6th to 8th Respondent, as submitted by the Petitioner in its representation dated 5.10.2020 to the 1st Respondent as per Annexure-B by issuing a Writ of Mandamus or any other writ in the nature of a Writ of Mandamus; I. Direct the 2nd Respondent to withdraw the provisional attachment of bank account maintained by the Petitioner with the 7th Respondent, as submitted by the Petitioner in its representation dated 5.10.2020 to the 2nd Respondent as per Annexure B1 by issuing a Writ of Mandamus or any other writ in the nature of a Writ of Mandamus Or in the alternative J. Direct the 1st and 2nd Respondent to consider the Petitioner's representation dated 05.10.2020 as per Annexure - B and B1 and direct the 1st and 2nd Respondent to furnish all the details and documents sought for and conduct the entire proceedings afresh by providing a fair and sufficient opportunity of being heard by issuing a Writ of Mandamus or any other writ in the nature of a Writ of Mandamus."

Learned counsel for respondent has filed a memo which reads as hereunder:

The above Writ Petition has been filed challenging the Provisional Attachment of the Petitioner's bank accounts and trade debts vide various Orders issued between 14.02.2020 and 05.10.2020. NC: 2023:KHC:19561

It is stated that the Provisional Attachment Orders issued under Section 83(1) of the CGST Act, 2017 shall cease to have effect after the expiry of one year from the date of Order as per Section 83(2). By virtue of operation of Section 83(2), the prayers sought for in the Writ Petition are infructuous,

In any case, upon the expiry of the Provisional Attachment Orders, a Show Cause Notice bearing No. 45/2022-23 BZU dated 01.09.2022 has already been issued to the Petitioner by the Respondent No. 1 Authority, which is presently pending adjudication.

In view of the above factual position, the above Writ Petition may be disposed of as infructuous."

It is noticed that in terms of Section 83(2) of the Central Goods and Services Tax Act, 2017 (for short 'the Act') the provisional attachments orders by operation of law ceases of have effect after the expiry of a period of one year from the date of the order made under Sub- Section (1). Admittedly, in the present case, the period of one year from the passing of the provisional orders of attachment has expired as evident from the details furnished and the provisional orders of attachment NC: 2023:KHC:19561 automatically by operation of law have been ceased to be in operation.

Accordingly, the impugned orders of attachment at Annexures-A, A1, A2, A4 and A5 are declared to be no longer in operation from the expiry of the period of one year as stipulated under Section 83(2) of the Act. The Bank authorities to take note of the same forthwith.

Accordingly, petition is disposed off. JUDGE VP