Rajeev vs. The Commissioner Of CGST Rohtak And Another

Held

The Court disposed of all eight writ petitions based on a consensus reached between the parties. The consensus stipulated that the respondents would conclude their investigation and assessment within three months from the date of the order. This was made conditional on the petitioners cooperating fully with the investigation and assessment process. As a consequence of this agreement, the petitioners were directed to appear before the Commissioner of CGST, Rohtak, on February 5, 2020. The Court did not delve into the merits of the petitioners' challenge to the freezing of their bank accounts without a show cause notice or determination of liability, as the matter was resolved through mutual agreement. The ratio decidendi is that parties can resolve tax disputes through mutual agreement, leading to a consensual order by the High Court, provided it aligns with procedural fairness and timelines.

Facts

Eight writ petitions were filed before the Punjab and Haryana High Court challenging the action of the respondents, the Commissioner of CGST, Rohtak, and another authority, for freezing the bank accounts of the petitioners. The petitioners contended that their bank accounts were debited without any order determining their tax liability and without prior issuance of a show cause notice. The respondents filed a written statement. During the proceedings, a consensus was reached between the parties. The petitioners agreed to cooperate with the investigation and assessment, and the respondents agreed to conclude the investigation and assessment within three months from the date of the order. The petitioners were directed to appear before the Commissioner of CGST, Rohtak, on February 5, 2020, for this purpose.

Key Issues

1. Whether the respondents' action of freezing the bank accounts of the petitioners was arbitrary and illegal, violating principles of natural justice, by debiting accounts without determining liability and issuing a show cause notice? (Question of law). Petitioner's argument: The petitioners argued that the freezing of their bank accounts was an arbitrary action by the revenue authorities. They contended that such a drastic measure, leading to the debit of their accounts, could not be taken without first determining their tax liability and providing them with an opportunity to be heard through a show cause notice, thereby violating the principles of natural justice. Revenue's argument: The judgment records that a limited consensus was arrived at between the parties. No specific arguments were recorded for the respondents regarding the legality of freezing the bank accounts without a show cause notice or determination of liability.