Tirupati Overseas vs. The Principal Commissioner Of GST And Ors

Facts

The petitioners, Tirupati Overseas, Sameer Garg, Gian Chand Singhal, Aashna Singhal, and Mahadev Software Private Limited, filed writ petitions before the Delhi High Court challenging the freezing of their bank accounts. They contended that their accounts were frozen under Section 83(1) of the CGST Act for periods exceeding one year, arguing that such orders cease to be operative after one year as per Section 83(2). The GST Department (respondent no.1) submitted that fresh freezing orders had been issued, and less than a year had passed since their issuance. The petitioners stated they had not received these fresh orders. In one instance (W.P.(C) 11678/2024), the ICICI Bank (respondent no.3) indicated the petitioner's account was closed in July 2021.

Held

The Court directed the respondents (GST Department) to provide copies of the respective orders passed under Section 83(1) of the CGST Act/DGST Act for freezing the petitioners' bank accounts. The respondent Bank was also directed to communicate the reasons for freezing the accounts. The Court stated that if the petitioners were aggrieved by any of these Section 83(1) orders, they were at liberty to file objections under Rule 159(5) of the Central Goods and Services Tax Rules, 2017. Any such objections filed would be considered in accordance with the law. The Court explicitly reserved all rights and contentions of the parties. The petitions were disposed of with these directions, leaving the substantive validity of the freezing orders to be addressed through the objection mechanism.

Key Issues

1. Whether the orders freezing the petitioners' bank accounts under Section 83(1) of the CGST Act have ceased to be operative due to the expiry of the one-year period stipulated in Section 83(2) of the CGST Act? 2. Whether the petitioners have been properly served with any subsequent orders freezing their bank accounts? The petitioners argued that the freezing orders were invalid as they had remained in effect for over one year, citing Section 83(2) of the CGST Act. They sought directions to de-freeze their accounts. The Revenue contended that fresh orders had been issued, rendering the petitioners' argument regarding the one-year expiry moot. The petitioners countered that they had not received these fresh orders.