Suraj Informatiics PVT. LTD vs. Union Of INDIA Thr The Secretary Ministry Of Law And Justice And Ors

Held

The Court directed the unblocking of the Cash Credit Account (918030098112727), acknowledging the Respondent's statement that such accounts cannot be blocked. Regarding the Current Account (918020107718156) and the blocked ITC of Rs. 55,29,005/-, the Court accepted the Respondent's statement that a copy of the 'reasons to believe' recorded by the Commissioner under Section 83 of the CGST Act would be provided to the Petitioner within one week. The Petitioner stated they would file a representation to the concerned authority after receiving the reasons. The Court directed that if such a representation is filed, the concerned authority shall dispose of it within eight weeks. The petition was disposed of on these terms.

Facts

The Petitioner, Suraj Informatics Pvt. Ltd., approached the Bombay High Court challenging the blocking of its bank accounts by the revenue authorities. The Petitioner contended that one of the blocked accounts, bearing number 918020107718156, was a Current Account, and the blocking of this account had resulted in the blocking of Input Tax Credit (ITC) amounting to Rs. 55,29,005/-. The Petitioner also stated that they had not been provided with a copy of the 'reasons to believe' recorded by the Commissioner under Section 83 of the CGST Act. The Respondent, Union of India and others, acknowledged that one of the accounts, 918030098112727, was a Cash Credit Account, and agreed that such accounts cannot be blocked. The Respondent also undertook to provide the Petitioner with a copy of the 'reasons to believe' within one week.

Key Issues

1. Whether the blocking of the Current Account bearing number 918020107718156 by the revenue authorities is valid, particularly in light of the Petitioner's claim that this action has led to the blocking of Input Tax Credit (ITC) of Rs. 55,29,005/-, and whether the Petitioner was provided with the 'reasons to believe' recorded by the Commissioner under Section 83 of the Central Goods and Services Tax Act, 2017 (CGST Act)? Petitioner's arguments: The Petitioner argued that the Current Account should not have been blocked, and that the blocking of this account has consequently blocked their ITC. They further contended that they were not furnished with a copy of the 'reasons to believe' recorded by the Commissioner, which is a prerequisite for such action. Revenue's arguments: The Revenue acknowledged that a Cash Credit Account cannot be blocked. Regarding the Current Account, the Revenue agreed to provide the Petitioner with a copy of the 'reasons to believe' within one week.