Sameer Garg vs. The Principal Commissioner Of GST And Ors

Facts

The petitioners, including 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 these accounts were frozen by orders passed under Section 83(1) of the Central Goods and Services Tax Act, 2017 (CGST Act), and that these orders had expired after one year as per Section 83(2) of the CGST Act. The petitioners claimed their accounts had been frozen for over a year, with some attachments lasting nearly three years. The GST Department, represented by the Principal Commissioner of GST, argued that fresh freezing orders had been issued, and a year had not elapsed since their issuance. The petitioners stated they had not received these fresh orders.

Held

The Court directed the respondents (GST Department) to send copies of the respective orders passed under Section 83(1) of the CGST Act/DGST Act for freezing the bank accounts of the petitioners. The respondent Bank was also directed to communicate the reasons for freezing the bank accounts. The Court further 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. The Court clarified that any such objections, if filed, would be considered in accordance with the law, and all rights and contentions of the parties were reserved. The petitions were disposed of in terms of these directions. The Court did not definitively rule on the operative validity of the original freezing orders, leaving it to the petitioners to pursue remedies through objections.

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? Petitioner's Contention: The petitioners argued that Section 83(2) of the CGST Act mandates that an order of provisional attachment under Section 83(1) shall cease to have effect after the expiry of one year from the date it was passed. They asserted that since their bank accounts were frozen more than a year ago, the orders were no longer valid, and their accounts should be de-frozen. Revenue's Contention: The respondent GST Department contended that fresh orders freezing the petitioners' bank accounts had been issued, and the one-year period from the date of these new orders had not yet expired. Therefore, the attachments remained valid.