M/S Mahima Enterprises vs. Director General Of Goods And Service Tax Intelligence, Jaipur Zonal Unit & Anr.

Facts

The petitioner, M/s Mahima Enterprises, filed a writ petition before the Delhi High Court challenging an order dated 29.05.2024. This order, issued by the Director General of Goods and Service Tax Intelligence, Jaipur Zonal Unit (respondent no.1), provisionally attached the petitioner's bank account maintained with Indian Overseas Bank. The petitioner contended that the order in FORM GST DRC-22 lacked any reasons for the attachment. Furthermore, the petitioner stated that it had subsequently deposited tax aggregating to ₹23,00,000/-. The petitioner also claimed that due to the absence of reasons, it was unable to file objections under Rule 159(5) of the Central Goods and Services Tax Rules, 2017.

Held

The Court held that the respondents should provide the petitioner with a copy of the reasons for attaching its bank account within one week from the date of the order. The Court further stated that the petitioner would be at liberty to file its objections under Rule 159(5) of the Central Goods and Services Tax Rules, 2017, after receiving the reasons. The Court emphasized that any objections filed by the petitioner would be considered in accordance with the law. The Court did not decide on the validity of the attachment itself, but rather directed the procedural step of providing the reasons to enable the petitioner to pursue its legal remedies. The issue of whether the attachment was justified was implicitly left to be decided after the objections are filed and considered.

Key Issues

1. Whether the order of provisional attachment of the petitioner's bank account, issued in FORM GST DRC-22, is vitiated by the absence of recorded reasons, thereby preventing the petitioner from filing objections under Rule 159(5) of the Central Goods and Services Tax Rules, 2017? Petitioner's Contention: The petitioner argued that the order of provisional attachment of its bank account was passed without providing any reasons. This lack of reasons rendered it impossible for the petitioner to file its objections as contemplated under Rule 159(5) of the Rules, thus violating its right to be heard. The petitioner relied on the principle that administrative actions must be reasoned. Revenue's Contention: The judgment does not record any specific arguments made by the respondents (Director General of Goods and Service Tax Intelligence and another) in response to the petitioner's claims regarding the lack of reasons or the inability to file objections.