Gian Chand Singhal 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, and thus, the orders should have ceased to be operative as per Section 83(2). The respondents (GST Department) stated that fresh orders freezing the accounts had been issued, and one year had not elapsed since their issuance. The petitioners claimed they had not been served with these fresh orders. In one instance, ICICI Bank stated that the petitioner's account was closed in July 2021.

Held

The Court directed the respondents 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 noted that the petitioners had not taken effective steps to ascertain the reasons for the freezing. It was held 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. If such objections were filed, they would be considered in accordance with law. All rights and contentions of the parties were reserved. The Court did not definitively rule on whether the original orders had ceased to be operative, as the existence and service of fresh orders were contested, and the petitioners were given an avenue to challenge any existing or new orders.

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 one year, as stipulated in Section 83(2) of the CGST Act? Petitioner's Argument: The petitioners argued that the orders freezing their bank accounts were passed more than one year prior, and in some cases, almost three years ago. Relying on Section 83(2) of the CGST Act, they contended that such orders automatically cease to be operative after one year, and therefore, their bank accounts should be de-frozen. Revenue's Argument: The respondents (GST Department) submitted that fresh orders freezing the respective bank accounts of the petitioners have been issued, and a period of one year has not yet elapsed since the issuance of these fresh orders. They did not explicitly address the validity of the original orders or the petitioners' claim of non-service of fresh orders.