Shri. Chotu Lal vs. Union Of INDIA And Ors

Held

The Court allowed the Respondent's request to withdraw the communication dated January 8, 2022, to the extent it directed banks not to permit any debit from the specified accounts. The Court directed that the banks should not permit any debit for two working days from the date of the order (excluding the date of the order), during which period the Respondents would take such action as advised in accordance with law. It was clarified that if no valid action was taken within this timeframe, the banks would be free to permit debits from the accounts. The Court explicitly stated that no observations were made on the merits of the matter. The primary issue regarding the legality of the Superintendent's power under Section 70 was implicitly addressed by allowing the withdrawal of the offending part of the communication, thereby rendering the Petitioner's challenge to that specific direction moot.

Facts

The Petitioner, Shri. Chotu Lal, filed a writ petition challenging a communication dated January 8, 2022, issued by the Superintendent, Anti-Evasion, Group-8, CGST, Delhi North. This communication was addressed to banks and, according to the Petitioner, illegally directed them not to permit any debit from specified accounts under Section 70 of the CGST Act, 2017. The Petitioner argued that only a Commissioner has the power to pass such an order under Section 83 of the CGST Act. The Respondent, Union of India and Ors., through Mr. Mishra, sought leave to withdraw the impugned communication to the extent of directing banks not to permit debits. The Respondent requested a two-day period for the banks to refrain from permitting debits, during which the Respondents would take appropriate action in accordance with the law.

Key Issues

1. Whether the communication dated January 8, 2022, issued by the Superintendent, Anti-Evasion, Group-8, CGST, Delhi North, directing banks not to permit any debit from specified accounts under Section 70 of the CGST Act, 2017, is illegal. Petitioner's Contention: The Petitioner argued that the Superintendent lacks the power to issue such a direction to banks, as only a Commissioner can pass such an order under Section 83 of the CGST Act, 2017. Respondent's Contention: The Respondent sought leave to withdraw the impugned communication to the extent of directing banks not to permit any debit from the accounts. The Respondent requested a short period for the banks to refrain from permitting debits, during which the Respondent would take action in accordance with law. The Respondent did not explicitly address the legality of the Superintendent's power under Section 70.