Jv Creatives PVT. LTD. vs. Principal Additional Director General , Dggi, Gurugram Zonal Unit, Gurugram And Anr

Facts

The petitioner, JV Creatives Pvt. Ltd., challenged an order dated 26.06.2024 passed by the Principal Additional Director General, DGGI, Gurugram, which rejected the petitioner's objections to the provisional attachment of its bank account. The attachment was purportedly made under Section 83 of the CGST Act. The petitioner was informed by ICICI Bank that its account had been attached. Investigations revealed that the petitioner had claimed Input Tax Credit (ITC) of ₹26,91,938/- from two suppliers, M/s Gupta Enterprises and M/s Sunrise Ventures, who were allegedly fake. M/s Gupta Enterprises, stated to be a proprietorship of Vikram, was found non-existent at its registered address, and Vikram was identified as a taxi driver. Vikram allegedly stated that his identity was used by Shyam Dev Gupta to create the entity and issue "goods less invoices". Similarly, M/s Sunrise Ventures, a proprietorship of Taekwondo player Shesh Nath Prasad, was also allegedly used by Shyam Dev Gupta to issue invoices without goods.

Held

The Court held that the exercise of power by the Commissioner to provisionally attach the petitioner's bank account was warranted. The Court found that the facts clearly indicated the Commissioner had deemed it necessary to attach the account to protect the interest of the revenue. The Court reasoned that the material available with the Commissioner had a live nexus with his opinion, and therefore, the impugned order could not be faulted. The Court concluded that the petition was unmerited. The operative direction was the dismissal of the petition.

Key Issues

1. Whether the provisional attachment of the petitioner's bank account under Section 83 of the CGST Act was warranted based on the material available with the Commissioner? The petitioner argued that the provisional attachment of its bank account was unwarranted. The revenue, represented by the Principal Additional Director General, DGGI, contended that the Commissioner had sufficient material to form an opinion that the attachment was necessary to protect the interest of the revenue. The revenue relied on the findings of investigations which indicated that the petitioner had claimed ITC from suppliers found to be fake, with their identities allegedly being misused by a third party to issue invoices without actual supply of goods. The revenue asserted that there was a live nexus between the available material and the Commissioner's opinion to provisionally attach the bank account.