(2024) 24 Centax 321 (Kar.)

IN THE HIGH COURT OF KARNATAKA AT BENGALURU S.R.KRISHNA KUMAR, J.

SJR PRIME CORPORATION PVT. LTD.

Versus

SUPERINTENDENT OF CENTRAL TAX

Writ Petition No. 26351 of 2024 (T-RES), decided on 1-10-2024

GST : Where Competent Authority issued notice to bank of assessee for recovery of outstanding interest payable by assessee while assessee challenged said notice contending that it noted principles of natural justice apart from being vitiated on account of non-following of prescribed procedure in law prior to issuing notice, in order to provide one more opportunity was to be given to assessee to submit his reply to alleged demand made in notice.

Recovery – Garnishee notice – Competent Authority issued notice to bank of assessee under section 79(1)(c) of CGST Act for recovery of outstanding interest payable by assessee – Assessee challenged said notice contending that said notice was illegal, arbitrary and contrary to principles of natural justice apart from being vitiated on account of non-following of prescribed procedure in law prior to issuing notice – However, Competent Authority submitted that it had followed procedure prescribed in law before issuing notice – HELD : One more opportunity was to be given to assessee to submit his reply to alleged demand made in notice [Section 79 of Central Goods and Services Tax Act, 2017/Karnataka Goods and

Services Tax Act, 2017] [paras 5 and 6]

In favour of assessee

REPRESENTED BY : Shri Balachandran B.S., Adv. for the Petitioner.

Shri Aravind V. Chavan, Adv. for the Respondent.

[Order]. – In this petition, petitioner seeks the following reliefs:

” (i) issue a writ of certiorari or any other writ as the Hon’ble High Court may deem fit and quash the following:

ANNEXURE-E impugned notice dated 30.7.2024 issued by the Respondent No.2 to the Petitioner’s bank under section 79(1) (c) of the CGST Act in GST DRC-13 in Notice No.02/2023 (DRC-13) and DIN: 20240757000000000D2A.

• To issue the writ of mandamus or any other appropriate writ in the nature of mandamus writ, order or direction directing direct the Respondent No.2 to lift the attachment placed on the bank account No.32445027247 of the Petitioner maintained with State Bank of India, No. 117, 7^th Block Industrial Layout, Koramangala , Bengaluru -560034 for recovery of the outstanding interest payable in pursuant to garnishee notice dated 30.07.2024 issued by Respondent No.2 (ANNEXURE-E).
• To issue any other order(s), direction(s), writ(s) or any other relief(s) as this Hon’ble Court deems fit and proper in the facts and circumstances of the case and in the interest of justice;”

2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.
3. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner submits that the impugned notice in GST DRC – 13 dated 30.07.2024 issued by respondent No.2 under Section 79(1)(c) of the CGST Act to the State Bank of India blocking/freezing the Bank account for the alleged demand in a sum of Rs.64,49,778/- is illegal, arbitrary and contrary to the principles of natural justice apart from being vitiated on account of non following of prescribed law prior to issuing notice invoking Section 79 of the CGST Act and as such, the impugned order at Annexure-E deserves to be quashed.
4. Per contra, learned counsel for the respondent on instructions submits that respondent has followed the procedure prescribed in law before issuing the notice, which does not warrant interference by this Court.
5. Though several contentions have been urged by both sides with regard to compliance/non compliance of the mandatory prescribed by the CGST Act prior to issue of notice, without expressing any opinion on the merits/demerits of the rival contentions and in order to provide one more opportunity to the petitioner to submit his reply to the alleged demand made in Annexure-E, I

deem it just and appropriate to dispose of this petition directing the petitioner to appear before respondent No.2 on 14.10.2024 and to proceed further in accordance with law.

6. In the result, I pass the following:

ORDER

• Petition is hereby disposed of.
• Petitioner is directed to appear before respondent No.2 on 14.10.2024.
• On that day, e., 14.10.2024, respondent shall furnish copies of notices/intimations/documents etc., which have come into existence prior to Annexure-E dated 30.07.2024 to the petitioner.
• Upon the respondents furnishing the said documents to the petitioner, petitioner shall submit reply to the same, pursuant to which respondent No.2 shall provide sufficient and reasonable opportunity to the petitioner and proceed further in accordance with law.
• It is further directed that blocking/freezing of the Bank account of the petitioner in State Bank of India, Koramangala shall stand vacated except to the extent of alleged demand subject to the condition that the petitioner shall maintain minimum balance of Rs.64,49,778/- till disposal of proceedings by respondent No.2, who shall conclude the proceedings within a period of one month from 14.10.2024.