M/S S R Enterprise vs. Commissioner, Central GST And Excise
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The petitioner, M/s S R Enterprise, filed a writ application challenging the provisional attachment of its bank account under Section 83 of the CGST Act, 2017, and the withholding of IGST refunds for goods exported (zero-rated supplies). The petitioner sought the quashing of the attachment proceedings, the sanction of the refund, and directions for the authorities to conclude their inquiries. The bank account attachment was set to expire on February 25, 2021. The revenue contended that the petitioner was identified as a 'risky exporter' and an inquiry into their dealings was ongoing. The court heard arguments from both sides regarding these grievances.
Held
The Court noted that the statutory time period for the bank account attachment was set to expire on February 25, 2021, implying it would be defreezed by efflux of time. Regarding the withholding of the IGST refund, the Court acknowledged the ongoing inquiry into the petitioner being a 'risky exporter'. The Court directed the concerned department to complete the inquiry within eight weeks from the date of the order. It further stipulated that if any incriminating material surfaced and the department decided to withhold the refund, an opportunity of hearing must be provided to the petitioner before a final decision is taken. The Court disposed of the writ application with these observations and directions.
Key Issues
1. Whether the provisional attachment of the petitioner's bank account under Section 83 of the CGST Act, 2017, was bad and without authority of law. 2. Whether the respondent authorities are obligated to immediately sanction the refund of IGST paid on goods exported ('Zero Rated Supplies'). Petitioner's Arguments: The petitioner argued that the attachment of their bank account was without authority and sought its quashing. They also prayed for the immediate sanction of their IGST refund for exported goods. They further requested the court to direct the respondent authorities to conclude their proceedings within a specified time and submit a report. Revenue's Arguments: The revenue, through Mr. Raval, submitted that the petitioner was identified as a 'risky exporter' and that an inquiry into their dealings was still in progress. They stated that a decision regarding the refund would be taken after the inquiry concluded.
Sections Cited
Section 83
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Cause title — parties, addresses and appearances
ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)
By this writapplication under Article 226 of the Constitution of India, the writapplicant has prayed for the following reliefs: 30(a) To issue writ of or in the nature of a mandamus or any other appropriate writ, order or direction holding the proceedings initiated by Respondent No.1 of provisional attachment of bank account as bad and without authority of law and therefore quashed; (b) Be pleased to issue writ of mandamus or any other appropriate writ directing the respondent authorities to immediately sanction the refund of IGST paid in regard to the goods exported i.e. 'Zero Rated Supplies' made vide shipping bills mentioned in AnnexureJ(Colly). (c) Be pleased to issue writ of mandamus or any other appropriate writ directing the respondent authority to kindly conclude the proceedings within a specified time and submit the report to respondent no.4 (d) Pending admission, hearing and till final disposal of this petition, be pleased to direct the respondents: (i) from resorting to any coercive measure against the petitioner; C/SCA/9963/2020 ORDER (ii) to defreeze the bank account and allow the petitioner to continue with his business; (e) To award costs of and incidental to this application be paid by the respondents.
We have heard Mr. Avinash Poddar, the learned counsel appearing for the writapplicant and Mr. Nikunt Raval, the learned standing counsel appearing for the respondents.
The grievance of the writapplicant is twofold. First, with respect to the attachment of his bank account in exercise of powers under Section83 of the Central Goods and Services Tax Act, 2017 and secondly, with respect to withholding of the refund of IGST paid in regard to the goods exported i.e.'Zero Rated Supplies' made vide shipping bills.
So far as the first grievance is concerned, we take notice of the fact that on 25/02/2021 the statutory time period for keeping the bank account attached would come to an end. In such circumstances, the bank account attached as on date would get defreezed by efflux of time. So far as the second issue is concerned, according to Mr. Raval, a preliminary inquiry as regard the dealings of the writapplicant has revealed that he is one of the 'risky exporters'. Mr. Raval submits that the inquiry is still in progress. At the end of the inquiry, the concerned department shall take an appropriate call as regards the claim of the writapplicant with respect to the refund.
We dispose of this writapplication by observing that the inquiry may continue but the at the same time, it should not continue for an indefinite period of time. We expect the concerned department to complete the inquiry within a period of eight weeks from today and take C/SCA/9963/2020 ORDER an appropriate decision in accordance with law. We may observe one more thing that at the end of the inquiry that if something incriminating surfaces against the writapplicant and the concerned department decides to withhold the refund amount for all times to come then in such circumstances, an opportunity of hearing shall be given to the writ applicant and thereafter, a final decision shall be taken.
With the above, this writapplication stands disposed of. (J. B. PARDIWALA, J) (ILESH J. VORA,J) A. B. VAGHELA
Reproduced from the public record of the Gujarat High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.