M/S H.M. Industrial PVT. LTD vs. The Commissioner, CGST And Central Excise

Held

The Court held that the provisional attachment of the petitioner's bank accounts under Section 83 of the CGST Act was no longer justified. The Court noted that while the estimated liability at the time of passing the Section 83 order was Rs. 14.62 crores, the current estimate was Rs. 16.24 crores. However, the Court also acknowledged that the petitioner had already reversed input tax credit to the tune of Rs. 13,28,00,000. In the opinion of the Court, considering the substantial amount paid by reversing input tax credit, the interest of the Revenue was sufficiently secured. Therefore, the continued provisional attachment of the bank accounts was deemed unnecessary. The petition was allowed, and the respondent was directed to forthwith release the provisional attachment over the specified bank accounts of the petitioner.

Facts

The petitioner, M/s. H.M. Industrial Pvt. Ltd., filed a writ petition seeking a direction to the respondent, the Commissioner, CGST and Central Excise, to release its attached bank accounts. The Court had previously ordered the release of some of the petitioner's bank accounts on 06.02.2019 and 07.02.2019, finding the attachment orders to be without authority of law. This petition concerned the remaining attached bank accounts. The petitioner had reversed input tax credit of Rs. 12,99,32,058 and paid an initial demand of Rs. 7,51,01,066, totaling Rs. 13,52,00,000. The respondent stated that the total amount paid was Rs. 13,28,00,000, but the amount due and payable was Rs. 16.24 crores, with Rs. 14.62 crores due at the time of the Section 83 order.

Key Issues

1. Whether the provisional attachment of the petitioner's bank accounts under Section 83 of the CGST Act, 2017, is justified to protect the interest of the Government revenue, considering the amount already paid by the petitioner? Petitioner's contention: The petitioner argued that it had reversed input tax credit of Rs. 12,99,32,058 and paid an initial demand of Rs. 7,51,01,066, totaling Rs. 13,52,00,000. This amount, along with other payments, sufficiently secured the interest of the revenue, making the continued attachment unjustified. Respondent's contention: The respondent stated that while Rs. 13,28,00,000 had been paid, the amount due and payable by the petitioner was Rs. 16.24 crores, with Rs. 14.62 crores being the amount due when the Section 83 order was passed. They contended that the attachment was necessary to protect the Government revenue.