Tushar Trading Company vs. The Commissioner Of Central Tax

Facts

The petitioner, Tushar Trading Company, filed a writ petition seeking to quash a garnishee notice dated January 7, 2021, issued by Respondent No. 1 (The Commissioner of Central Tax, Ranga Reddy GST Commissionerate). This notice provisionally attached the petitioner's current bank account (No. 10200006531538) maintained with Respondent No. 3 (Bandhan Bank, Vanasthalipuram Branch). The attachment was made under Section 83 of the Central Goods and Services Tax Act, 2017 (CGST Act). Subsequently, Respondent No. 1 issued an intimation dated January 17, 2023, to Respondent No. 3, stating that the provisional attachment of the bank account had been decided to be withdrawn and the account should be restored to the petitioner. Despite this intimation, the petitioner alleged that Respondent No. 3 was not restoring the bank account.

Held

The Court noted that Respondent No. 1 had issued an intimation dated January 17, 2023, to Respondent No. 3, indicating that the provisional attachment of the petitioner's bank account had been decided to be withdrawn and that the account should be restored to the petitioner. The Court found that despite this intimation from the revenue authority, Respondent No. 3 had not yet restored the bank account to the petitioner. Therefore, the Court directed Respondent No. 3 to forthwith withdraw the attachment of the current account and restore it to the petitioner. The Court allowed the writ petition on this basis, finding that the inaction of the bank in restoring the account was contrary to the intimation received from the revenue department. The ratio decidendi is that once a revenue authority directs the withdrawal of a provisional attachment, the bank must comply promptly to restore the account to the assessee.

Key Issues

1. Whether the garnishee notice dated January 7, 2021, issued by Respondent No. 1, which provisionally attached the petitioner's bank account under Section 83 of the CGST Act, 2017, was illegal and arbitrary, warranting its quashing? 2. Whether Respondent No. 3 (Bandhan Bank) was obligated to allow bank operations in the petitioner's current account after receiving the intimation dated January 17, 2023, from Respondent No. 1, directing the withdrawal of the provisional attachment? Petitioner's arguments: The petitioner contended that the garnishee notice was illegal and arbitrary. They further argued that despite Respondent No. 1's subsequent intimation to withdraw the attachment and restore the account, Respondent No. 3 was failing to comply, thus preventing the petitioner from operating their bank account. Revenue's arguments: The judgment does not record any specific arguments made by the Revenue (Respondents No. 1 & 2) regarding the legality of the initial garnishee notice or their stance on the subsequent intimation. The focus of the court's decision was on the intimation issued by the Revenue and the subsequent inaction of the bank.