Faxon INDIA Trading PVT. LTD. Through Director Shoeb Suleman Dayater And Anr. vs. Office Of The Principal Commissioner Of Central Tax And Central Excise, Mumbai And Ors.

Held

The Court granted the petitioners leave to withdraw the petitions with liberty to file objections under clause (5) of Rule 159 of the CGST Rules, 2017. The Court directed that if the petitioners file such an objection, Respondent No. 1 shall decide it expeditiously after giving the petitioners an opportunity of hearing, in accordance with the CGST Rules, 2017. The Court did not explicitly rule on the validity of the orders, the lack of reasons, or the impact on refunds, as the petitions were withdrawn based on the liberty granted to file objections. The issue of whether the Additional Commissioner could pass such orders under Section 83 was implicitly addressed by allowing the petitioners to raise objections under Rule 159(5), which pertains to objections against provisional attachment.

Facts

The petitioners, Elenya India Trading Pvt. Ltd. and Faxon India Trading Pvt. Ltd., filed writ petitions seeking directions to de-freeze their bank accounts in Union Bank of India and Axis Bank. The Office of the Additional Commissioner, CGST and Central Excise, Mumbai Central, had provisionally attached these accounts under Section 83 of the CGST Act, 2017. The petitioners contended that the attachment orders were passed by the Additional Commissioner, not the Commissioner as stipulated, lacked reasons, prevented refunds from the Custom Department, and were issued without a post-decisional hearing. The respondents argued that the orders only restricted debits, allowing refunds to be credited, and that objections could be raised and decided by the appropriate authority.

Key Issues

1. Whether the provisional attachment orders issued by the Additional Commissioner under Section 83 of the CGST Act, 2017, are valid when Section 83 contemplates orders by the Commissioner. 2. Whether the provisional attachment orders are vitiated by a lack of reasons. 3. Whether the provisional attachment orders prevent the crediting of refunds from the Custom Department into the petitioners' bank accounts. 4. Whether the petitioners were entitled to a post-decisional hearing before the provisional attachment orders were passed. The petitioners argued that the orders were invalid due to being issued by an unauthorized authority (Additional Commissioner instead of Commissioner), lacking reasons, and not providing a post-decisional hearing. They also contended that the attachment prevented refunds from being credited. The respondents argued that the orders only restricted debits, not credits, and that the petitioners could raise objections to be decided by the appropriate authority.