Pravin Gulab Patil vs. Union Of INDIA & Anr.

Held

The Court held that the petitioners should avail of the statutory remedy available under Rule 159(5) of the CGST Rules, 2017. The Court noted that the petitioners were agreeable to this suggestion. Consequently, the Court disposed of the writ petitions, granting the petitioners liberty to file their objections before the Deputy Commissioner, Anti-Evasion, CGST East, against the impugned provisional attachment/freezing of bank accounts. The petitioners were directed to appear before the authority on February 5, 2021, at 11:30 AM, along with their objections and requisite documents. The authority was directed to dispose of the objections within two weeks of their receipt, after due intimation to the petitioners. The Court clarified that it had not examined the merits of the case or the contentions of either party, and the concerned authority would deal with the objections uninfluenced by any observations made in the order. The petitioners were granted liberty to pursue further remedies if aggrieved by the authority's decision.

Facts

The petitioners, Rajesh Kumar Patawa and Pravin Gulab Patil, filed writ petitions before the Delhi High Court challenging Form GST DRC-22 dated May 12, 2020, issued by Respondent No. 2, which resulted in the freezing of their respective bank accounts. The Respondent No. 2 stated that the freezing of accounts was a consequence of a search action under Section 67 of the CGST Act, 2017, which unearthed a scam involving fraudulent availment of Input Tax Credit (ITC) by 328 companies. The Respondent argued that an alternate efficacious statutory remedy was available to the petitioners under Rule 159(5) of the CGST Rules, 2017, and they should pursue that instead of invoking the writ jurisdiction of the High Court.

Key Issues

1. Whether the petitioners should be relegated to the statutory remedy available under Rule 159(5) of the CGST Rules, 2017, for challenging the provisional attachment of their bank accounts under Section 83 of the CGST Act, 2017? Petitioner's Argument: The petitioners agreed to pursue the statutory remedy under Rule 159(5) and sought time-bound directions for the authorities to decide their objections. They relied on a previous order of the same court in Ramakrishna Electro Components Pvt. Ltd. v. Union of India & Anr. (Order dated January 14, 2021, in W.P. (C) No. 11180/2020) where a similar approach was taken. Revenue's Argument: Respondent No. 2 contended that an alternate efficacious statutory remedy under Rule 159(5) of the CGST Rules, 2017, was available to the petitioners and they should avail of it.