Pranit Hem Desai vs. Additional Director General, Dggi, Azu

Held

The Court held that it would be reluctant to entertain the writ petitions under Article 226 of the Constitution of India due to the availability of an efficacious alternative remedy. The Court noted that the notices of attachment themselves informed the petitioners of their right to file objections under sub-rule (5) of Rule 159 of the CGST Rules before the competent authority, where all contentions raised in the petitions could be addressed. Therefore, the Court was not inclined to entertain the petitions on merits. The Court directed that if the petitioners file their objections under sub-rule (5) of Rule 159 of the CGST Rules on or before April 18, 2019, the competent authority shall consider them as filed within time. The competent authority was directed to consider all objections, including the one regarding the attachment being without authority of law, expeditiously and decide the application by April 30, 2019. The Court also noted that if any adverse order is passed, the petitioners would be free to challenge it before the appropriate forum.

Facts

The petitioners, Pranit Hem Desai and others, filed multiple Special Civil Applications challenging orders of attachment of their bank accounts issued by the Deputy Director, DGGI, Ahmedabad Zonal Unit. The attachments were made under Section 83 of the Central Goods and Services Tax Act, 2017. The notices of attachment informed the petitioners of their right to file objections within seven days under sub-rule (5) of Rule 159 of the Central Goods and Services Tax Rules, 2017. The petitioners argued that the attachment was without authority of law as no proceedings under Section 74 of the CGST Act had been initiated against them, despite the attachment order referencing such proceedings.

Key Issues

1. Whether the High Court should entertain writ petitions challenging bank account attachments under Section 83 of the CGST Act when an efficacious alternative remedy of filing objections under Rule 159(5) of the CGST Rules is available to the petitioners? The petitioners contended that the attachment of their bank accounts under Section 83 of the CGST Act was without authority of law because no proceedings under Section 74 of the CGST Act had been initiated against them, as indicated in the attachment order. They argued that this procedural defect vitiated the attachment. The revenue, through the DGGI, had issued notices of attachment which also informed the petitioners of their right to file objections under Rule 159(5) of the CGST Rules before the competent authority. The court had to decide whether to bypass this alternative remedy.