D M Builders vs. Assistant Commissioner Of

Held

The Court did not decide the merits of the writ petition. Instead, based on a mutual agreement between the petitioner and the respondents, the Court disposed of the writ petition. The petitioner was permitted to operate the bank accounts of both M/s. DS Builders and M/s. DM Builders, subject to two conditions: first, the petitioner had to pay 30% of the amount payable under the Assessment Order/Re-assessment Order by withdrawing funds from the said accounts, thereby partially lifting the attachment to that extent. Second, the petitioner had to furnish security to the satisfaction of the first respondent for the balance amount due under the Assessment Order/Re-assessment Order, upon which the attachment would be fully raised. The Court noted that all contentions of the parties in the pending appeal remain open. No costs were awarded.

Facts

The petitioner, D M Builders, a partnership firm, filed a writ petition challenging a recovery notice dated 09.01.2020 (erroneously mentioned as 9.1.2019) issued by the Assistant Commissioner of Commercial Taxes (Audit)-5.10, under Section 46(3) of the GST Act. This notice was addressed to the Branch Managers of Canara Bank and State Bank of India, directing them to attach the petitioner's bank accounts. The petitioner contended that the recovery notice was arbitrary and illegal. The matter was heard, and the court reserved judgment. However, both parties requested a further hearing and agreed to a settlement proposed by the Court.

Key Issues

1. Whether the recovery notice dated 09.01.2020 issued by the Assistant Commissioner of Commercial Taxes (Audit)-5.10, under Section 46(3) of the GST Act, is arbitrary and illegal, warranting quashing by this Court under Article 226 of the Constitution of India? Petitioner's Arguments: The petitioner argued that the recovery notice was arbitrary and illegal. No specific provisions of the GST Act were cited in the petition as being violated, but the challenge was based on the arbitrariness of the action. The petitioner sought to quash the notice and consequently lift the attachment of their bank accounts. Revenue's Arguments: The revenue, represented by the Assistant Commissioner, did not explicitly argue against the petitioner's claims in the provided text. However, their agreement to the Court's suggestion and the subsequent memo indicate a willingness to resolve the matter through a compromise involving payment and security.