Creative Koven Developers LLP vs. The Commissioner Of Central Tax
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The petitioner, Creative Koven Developers LLP, filed a writ petition challenging the attachment notices dated 08-02-2023 issued by the Commissioner of Central Tax, Ranga Reddy GST Commissionerate, to its bankers (HDFC Bank, State Bank of India, and IndusInd Bank). These notices provisionally attached the petitioner's bank accounts under Section 83 of the CGST Act, 2017. The petitioner contended that these attachments were illegal and arbitrary. During the proceedings, it was disclosed that the petitioner's outstanding GST liability was approximately Rs. 8,42,00,000. The petitioner had also deposited over Rs. 5 crore and filed objections against the provisional attachment under Rule 159 of the CGST Rules, 2017, and was granted a personal hearing. The Court directed the respondent to pass an appropriate order under Rule 159(5) and place it before the Court.
Held
The Court noted that the Commissioner of Central Tax, Ranga Reddy GST Commissionerate, had passed an order on 15.03.2023 under Rule 159(5) of the CGST Rules, 2017, releasing the bank accounts of the petitioner from provisional attachment. To this extent, the petitioner's grievance regarding the attachment was redressed. However, the petitioner's counsel raised a concern that certain observations made by the Commissioner in the order might prejudice the assessment proceedings. The Court held that the observations made by the Commissioner were in the context of examining the objection to the provisional attachment under Section 83 of the CGST Act and would not influence the assessment proceedings, which would be conducted in accordance with law. The writ petition was disposed of on this basis.
Key Issues
1. Whether the provisional attachment notices dated 08-02-2023 issued to the petitioner's bankers, attaching its bank accounts under Section 83 of the CGST Act, 2017, are void, illegal, arbitrary, and violative of constitutional rights and principles of natural justice. The petitioner argued that the attachment was made without proper authority and in violation of due process. The revenue contended that the attachment was a necessary measure to protect government revenue. 2. Whether the observations made by the Commissioner in the order passed under Rule 159(5) of the CGST Rules, 2017, could prejudice the ongoing assessment proceedings. The petitioner expressed concern that certain observations might influence the fair adjudication of its tax liability. The revenue likely argued that the observations were specific to the attachment proceedings and would not bind the assessment.
Sections Cited
Section 83, Rule 159(5)
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Cause title — parties, addresses and appearances
in the absence of an ; ss;essment order. lA NO: 3 OF 2023 Petition under I ection 151 CPC praying that in the circunr:;tances stated in the affidavit filed in su rporl of the petition, the High court may Le pleased to direct the Respondent Nos. ro 3 not to arrest the Petitioner or any rr:lrer employees in pursuance of the searr h operations carried out. Counsel for the Petiti, 'ner: SRI S.RAVI Counsel for the Resp,'ndent Nos.'l TO 4: SRI DOMINIC FERNANDES, senior standing counsel for )BlC Counsel for the Respr ndent Nos.S TO 7: -- The Court made the ft llowing: ORDER
THE HON'BLE THE CHIEF JUSTICE UJJAL BHI,IYAN AND TTIE HON'BLE SRI JUSTICE N. TIJXARAMJI WRIT PETITION No.6587 of 2o23 ORDER: Pe. the Ho^'ble the Chief Justice Ujjal Bhusan) Heard Mr. S.Ravi, learned Senior Counsel for the petitioner and Mr. Dominic Fernandes, learned counsel for respondents No.l to 4. 2. This petition has been filed under Article 226 of the Constitution of India assailing the legality and validity of the notices dated 14.02.2023 issued by respondent No.1 addressed to the bankers of the petitioner i.e., respondents No.S, 6 and 7 provisionally attaching bank accounts of the petitioner under Section 83 of the Central Goods and Services Tax Act, 2U.7 (briefly, 'the CGST Act'hereinafter).
On 13.03.2023 we had passed the following order: ln the course of the argument, two things have transpired. Firstly, outstanding Goods and Services Tax (GST) of the petitioner allegedly not paid woutd be to the tune of Rs.8,42,OO,OOO.O0 as disclosed by the petitioner. I I
!-I Out ,)f t cror o i. : and lien Ru)r: (5) , responde Sectron f 2017 peti tr,rner
We havt end of a lon{ bank acoou attachme n t. i: " letitioner has dcposited more than Fs.5 :condly. undcr Rule 159 of the Central (il;ds cr's Tax Rule s, 2O 17, more particularly ri rb- petitioncr has hled objection before th() 1"1 .t against th. invocation of power ttrder I of thc Central Goods and Services TzL': .r\ct, )ersonal hearing was also granr ed t<' thc Th .t bting thc position, rve direct 1"t respotr:ent to pasii n approPriate ordcr under Rule 159 cf thc Ccntral ( tr,ds and Scn'rccs'fai Rules, 201i al-rcl ;'laccr thc silmc b,:[ore thc Court on 17 .O3.2O23 with ad",rncc copr o lt' rrcd coutrsel for thc petitioner. i-is c n 17.03.2023 as the first rtem
When tl e matter is called upon today, we [tirve been informed th e1 Commissioner, Ranga Re<ldy GST Commissione a:e, has passed Order No. I I 2cra3 Cated 15.03.202.3 u rrler Rule 159(5) of the Central (i:ods; and Services Tax I ules, 2O17 F,erused the order dated 15.03.2O1t,3. lrtthe rarration, Commissioner has relr:i,rse I the Lts of the petitioner from r'l':)vis;ional I \
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To that extent, grievance raised by the petitioner stands redressed.
However, Mr. S.Ravi, learned Senior Counsel for the petitioner submits that in the course of the narration, Commissioner of Ranga Reddy GST Commissionerate has made certain observations, which may come in the way of a fair adjudication in the assessment proceedings' B. Needless to say, observations made by the Commissioner of Ranga Reddy GST Commissionerate while passing the order dated 15.03.2023 was in the context of examining the objection raised by the petitioner to provisional attachment of bank accounts under Section 83 of the CGST Act ald certainly those would not influence the assessrnent proceedings that may be initiated against the petitioner, which will be done in accordance with law'
This disposes of the writ petition. a i I i
1 - Miscell lneous applications pending, if any shall stand closed Hou.ever, there shall be no order ils to costs //// K.AMMAJI ASSIiSiTANT REGISTRAR L.,L./ liiECrTlON OFFICER To 7 PSK. BSR e5x( 1 2 J 4 5 6 The Comrniss Posnett Baha Superintende Commiss,one lnspector (An Joint Conrmis One CC to St One CC b SF loPUCl Two CD Copir orer.gf Central T_ax, Ranga Reddy GST Cc,rnmissionerate, 'an, Tilqf Road. Ramkote, Hyderabad - 5OC 101 rt.(Anti Evasion), Central Tai, Ranga Redrlv GST, ate. .- Evasron). Central Tax, Ranga Reddy G{il Commissionerate ,rc,ner. Cen-tral Tax, Ranga Reddy GST Cc rn mis sionerate. I lj.RAV|, Advocate IOpUCI I IlOtVlNlC FERNANDES, ienior standing ,:ounsel for CBIC S
HIGH COURI DATED: 1710112023 ORDER WP.No.6587 <,12023 DISPOSING OF THE WRIT PETITION WITHOUT CO BTS. lo y',', 1 g I'Pfl ?t?1 l'- to t9 \ t( kbL -i .'
Reproduced from the public record of the Telangana High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.