M/S. Galaxy International vs. Union Of INDIA And Ors

Facts

The Petitioner, M/s Galaxy International, filed a writ petition before the Bombay High Court challenging an action by the Respondents (Union of India and others). The Petitioner indicated a willingness to approach the concerned Commissioner under Rule 159(5) of the Central Goods and Services Tax Act, 2017. The Petitioner sought permission to operate its bank account for an amount exceeding the demand made by the Respondents, as investigations were ongoing. The Respondents, represented by counsel, stated that they could not accede to the Petitioner's request as the amount in dispute was subject to change due to ongoing investigations. The Court noted that the Respondents' stand was not without merit.

Held

The Court did not decide the core issue of whether the Petitioner could operate its bank account for amounts exceeding the demand. Instead, it disposed of the petition by directing the Petitioner to lodge its objections under Section 159(5) of the Rules within one week. The Court further directed the Respondent authorities to provide a hearing to the Petitioner and issue a final decision within three weeks from the date of the Petitioner lodging its objections. The reasoning was based on facilitating a procedural resolution rather than adjudicating the merits of the Petitioner's request regarding bank account operation. The Court acknowledged the Respondents' position regarding the fluid nature of the disputed amount due to ongoing investigations.

Key Issues

1. Whether the Petitioner should be permitted to operate its bank account for amounts exceeding the current demand by the Respondents, given that investigations are ongoing and the disputed amount is subject to change? Petitioner's Argument: The Petitioner argued that the demand from the Respondents was for a limited amount and that they should be allowed to operate their bank account for the portion exceeding this demand, especially since investigations were still in progress. They expressed willingness to approach the Commissioner under Rule 159(5) of the CGST Act. Respondents' Argument: The Respondents, through their counsel, stated that it was not possible to accede to the Petitioner's request. They contended that the amount specified was subject to change as investigations were ongoing, and their stand was not unmeritorious. They did not rely on any specific provisions, circulars, or precedents in their argument.