Mahender Kumar Lodaya vs. Directorate General Of GST Intelligance And Others

Facts

The petitioner, Mahinder Kumar Lodaya, filed a writ petition seeking to quash an order dated 23.07.2019, by which his saving account was attached. The attachment was made by the Director General of GST Intelligence & Ors. The respondent department, through its counsel, informed the Court that no decision had been taken to de-freeze the petitioner's bank account. It was also noted that the one-year period of attachment expired on 23.07.2020. The petition was filed before the High Court of Punjab and Haryana at Chandigarh.

Held

The Court held that the continued attachment of the petitioner's bank account beyond the one-year period, which expired on 23.07.2020, was not justified. The Court noted that the attachment order was dated 23.07.2019, and the respondent department acknowledged that no decision had been taken to de-freeze the account. In view of the expiry of the attachment period, the Court directed respondent No. 2 (likely the authority responsible for the attachment) to de-freeze the petitioner's bank account. The ratio decidendi is that bank accounts attached under GST provisions cannot be held indefinitely without a fresh order or a decision to continue the attachment, especially after the initial statutory period has elapsed.

Key Issues

1. Whether the continued attachment of the petitioner's bank account beyond the statutory period of one year is legally sustainable? This issue turns on the interpretation of provisions related to the duration of bank account attachment under GST law. The petitioner argued that the attachment order, issued on 23.07.2019, had expired by 23.07.2020, and therefore, the continued freezing of his account was illegal. The respondent department, while not explicitly arguing against the petitioner's claim on the expiry of the period, informed the court that no decision had been taken to de-freeze the account, implying a lack of action rather than a defense of continued attachment. No specific circulars or precedents were cited by either party.