M/S Jayanand Engineering PVT. LTD. vs. Central G.S.T And Excise

Held

The Court directed the petitioner to submit a reply/explanation within three days. Following this, the respondents were to decide within three days whether to invoke Section 79 of the GST Act, 2017. The Court did not definitively rule on the validity of the notice or the service thereof. Instead, it provided a procedural path for the petitioner to respond and for the revenue to reconsider its action. The core issue of whether the notice was properly served and whether the freezing of the bank account was justified was deferred pending the petitioner's explanation and the revenue's subsequent decision. The ratio decidendi, based on the immediate order, is that in cases of disputed notice service leading to drastic recovery actions, a final opportunity for explanation should be provided before the revenue makes a definitive decision on invoking recovery provisions.

Facts

The petitioner, M/s Jayanand Engineering Pvt. Ltd., filed a writ petition challenging a communication dated 18.04.2026 from the Assistant Commissioner, Central GST & Excise, Division- Rewa, directing the HDFC Bank to freeze the petitioner's bank account to the extent of Rs. 1,83,72,964/-. The respondents contended that a notice dated 11.02.2026 was sent to the petitioner's registered E-mail ID, but no reply was received, leading to the action under Section 79 of the Goods and Service Tax Act, 2017. The petitioner submitted an affidavit and an email inbox showing non-receipt of the notice. The respondents argued that the petitioner's registered E-mail ID was NAVYATRADERS78@GMAIL.COM, not the one provided by the petitioner, and that discrepancies were found in GSTR-1 and GSTR-3B, justifying the recovery.

Key Issues

1. Whether the notice dated 11.02.2026, purportedly sent to the petitioner's registered email ID, was duly served upon the petitioner, thereby validating the subsequent action of freezing the bank account under Section 79 of the Goods and Service Tax Act, 2017? Petitioner's contention: The petitioner argued that the notice was not received, as evidenced by their email inbox, and therefore, the freezing of their bank account was an arbitrary and illegal action. They relied on the email inbox provided as proof of non-receipt. Revenue's contention: The respondents argued that the notice was sent to the correct registered email ID (NAVYATRADERS78@GMAIL.COM) and that the petitioner failed to file a reply. They asserted that discrepancies in GSTR-1 and GSTR-3B necessitated the recovery action, treating the notice as served.