M/S. Vardhman Exim vs. Ms. Shubhagata Kumar, Commissioner Of CGST (Delhi West) & Ors.
Facts
The petitioner, M/s. Vardhman Exim, had its bank account frozen on July 14, 2020. The validity of this freeze, under Section 83(1) of the Central Goods and Services Tax Act, 2017, expired on July 13, 2021. Despite the expiry, the account remained frozen. The petitioner approached the Delhi High Court, and a Division Bench, by an order dated December 23, 2021, directed the bank account to be de-frozen. Subsequently, the respondents issued a letter to the bank on December 28, 2021, to de-freeze the account, which was received by the bank on December 29, 2021. However, on the same day, the bank account was allegedly re-frozen and provisionally attached. A summon was issued to the petitioner on December 30, 2021.
Held
The Court did not make a definitive finding on the merits of the petitioner's allegations of mala fide actions or the respondents' justifications for re-freezing the account. Instead, the petitioner's counsel sought time to obtain instructions and subsequently expressed a desire to withdraw the petition. The petitioner was granted liberty to pursue alternative remedies before the appropriate forum. Therefore, the Court did not decide the legal questions raised regarding the validity of the re-freezing or the alleged mala fide conduct. The operative direction was to dismiss the petition as withdrawn with liberty granted.
Key Issues
1. Whether the respondents' action of re-freezing the petitioner's bank account on December 29, 2021, subsequent to the Division Bench's order dated December 23, 2021, directing de-freezing, and prior to issuing a summon on December 30, 2021, constitutes a mala fide action and renders the court's earlier direction nugatory? Petitioner's contention: The petitioner argued that the respondents' actions were mala fide and made the Division Bench's order ineffective. They refuted allegations of non-cooperation, referring to paragraph 6 of the December 23, 2021 order, and stated readiness to cooperate with valid notices. Respondents' contention: The respondents contended that their actions were for the recovery of taxes, that the petitioner had not cooperated in earlier proceedings under Section 83(1) of the Act, and that there was no bar to re-initiating proceedings. They noted that the summon issued to the petitioner was to be replied to by the date of the hearing.
Sections Cited
Section 83(1)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
O R D E R %
2022
The hearing was conducted through video conferencing.
The Division Bench of this court, vide order dated 23.12.2021 in W.P.(C) NO. 14848/2021, had directed the petitioner‟s bank account to be de-frozen.
It is not in dispute that the account could have been frozen at best for one year under s.83(1) of the Central Goods and Services Tax Act, 2017 („the Act‟). The bank account of the petitioner was frozen on 14.07.2020, its validity expired on 13.07.2021. Despite that, for some reasons, the account was not de-frozen after that date and the petitioner had to approach the court, which resulted in the aforesaid relief to it.
Therefore, the petitioner‟s bank account was purportedly de-frozen vide a letter issued by resp
The judgment continues below.
Read the full judgment
A free account opens 10 full GST judgments a month (one account works on both bharattax.net and this site). Re-reading one you have already opened does not count again.
The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.
Reproduced from the public record of the Delhi High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.