Bhavesh Kiritbhai Kalani VS Union Of India

The petitioner is the proprietor of M/s Global Corporation, operating as a commission agent at the Agricultural Produce Market Committee in Gondal, holding a valid license No.LIC/18424 as required under Section 27 of the Gujarat Agriculture Produce Markets Act, 1963, and has a valid GST Registration Certificate under the Central Goods and Service Tax Act, 2017, with registration No.24BCSPK2560G1ZJ, and claims to be involved in numerous transactions with various parties, adhering to legal requirements in his business conduct.

The petitioner is the owner of M/s Global Corporation, a commission agent at the Agricultural Produce Market Committee in Gondal with a valid license No.LIC/18424 as required under Section 27 of the Gujarat Agriculture Produce Markets Act, 1963. The petitioner also holds a valid GST Registration Certificate under the Central Goods and Service Tax Act, 2017, with registration No.24BCSPK2560G1ZJ. Engaged in substantial transactions, the petitioner claims adherence to legal procedures in business operations. On 20.08.2020, the petitioner’s current account No.3785569992 at the Central Bank of India, Rajkot Main Branch, was frozen by an order from the Office of the Principal Commissioner of Central GST, Mumbai, without prior notice or opportunity for explanation. The petitioner has since been unable to operate the account and has sought information from the bank through its manager, who has not disclosed the reason for the account freeze despite multiple requests. The petitioner also approached the GST authority in Mumbai for clarification and was informed verbally that the account was frozen due to transactions with a third party violating CGST Act provisions. Seeking further information, the petitioner filed an application under the Right to Information Act, 2005, on 22.10.2020. The response from the bank on 28.10.2020 stated that the requested information could not be disclosed as it would impede the investigation, leading the petitioner to seek relief from the court.

The petitioner is the owner of M/s Global Corporation, a commission agent at the Agricultural Produce Market Committee in Gondal, operating under a valid license. The petitioner also holds a valid GST Registration Certificate under the CGST Act, 2017. The petitioner claims to adhere to the law in his numerous transactions with various parties. However, on 20.08.2020, the Central Bank of India froze his current account without prior notice, based on an order from the Office of the Principal Commissioner of Central GST, Mumbai, preventing him from accessing his account since then. The petitioner sought information from the bank and the GST authorities but received no satisfactory response. He was informally told that the account was frozen due to transactions with a third party violating the CGST Act. He then filed an application under the Right to Information Act, 2005, and received a reply on 28.10.2020 stating that disclosing the information would impede an investigation. Frustrated by the lack of transparency, the petitioner approached the court, arguing that the freezing of his account was arbitrary and not permissible under Section 83, which does not allow for freezing a third party’s account. He referenced previous judgments, including Valerius Industries Vs. Union of India and Kaish Impex Pvt. Ltd. Vs. Union of India, to support his case. The petitioner seeks several court orders: to quash the attachment order and direct the respondents to defreeze his account, to issue an interim order for defreezing the account pending the petition’s final hearing, to dispense with court fee filing due to the COVID-19 pandemic, and any other relief the court deems appropriate.

The petitioner is the proprietor of M/s Global Corporation, a commission agent at the Agricultural Produce Market Committee in Gondal, holding a valid license (LIC/18424) under Section 27 of the Gujarat Agriculture Produce Markets Act, 1963. The petitioner also has a valid GST Registration Certificate under the Central Goods and Service Tax Act, 2017 (registration No.24BCSPK2560G1ZJ). He follows the law in his voluminous transactions with several parties. On 20.08.2020, the Central Bank of India froze his current account No.3785569992 at the Rajkot Main Branch without prior notice. The freezing order came from the Principal Commissioner of Central GST, Mumbai, and the petitioner has been unable to operate the account since then. The petitioner approached the bank and the GST authority for information about the freeze but received no explanation. An RTI application filed on 22.10.2020 yielded a response on 28.10.2020 from the respondent no.3, stating that the information could not be disclosed due to an ongoing investigation. The petitioner claims the action is arbitrary, as Section 83 of the CGST Act does not allow freezing a third party’s account for steps taken against assessees. He cites previous judgments from the High Courts in support of his case. The petitioner seeks a Writ of Certiorari to quash the attachment order, direct the respondents to defreeze his account, and other reliefs deemed fit by the court. The court issued a notice on 22.12.2020. In response, the Deputy Commissioner, Mr. Rahul Dhingra, denied all the petitioner’s claims, stating that the case involves Sajid Imam Shaikh of M/s. Belluxa Trading Company, which procured bogus invoices and claimed a refund of accumulated ITC. M/s. Belluxa Trading Company was found non-existent. To safeguard government revenue, the matter was referred to the Union Bank of India, where a refund amount of Rs.3,15,52,578/- was received. The respondents found that Rs.48,25,000/- from this refund was transferred to M/s. Global Corporation’s account on 28.07.2020, leading to the freezing of the account by the Central Bank of India’s Rajkot Branch.

The petitioner, the proprietor of M/s Global Corporation, operates as a commission agent at the Agricultural Produce Market Committee in Gondal with a valid license No.LIC/18424 as required under the Gujarat Agriculture Produce Markets Act, 1963. The petitioner holds a valid GST Registration Certificate under the Central Goods and Service Tax Act, 2017, with registration No.24BCSPK2560G1ZJ. The petitioner, engaged in numerous transactions, discovered that his current account No.3785569992 at the Central Bank of India’s Rajkot Main Branch was frozen on 20.08.2020 by an order from the Office of the Principal Commissioner of Central GST, Mumbai, without any prior notice. Despite approaching the bank and the Mumbai GST office for reasons behind the freezing, he was informed orally that it was due to voluminous transactions with a third party violating CGST Act provisions. Seeking clarity, the petitioner filed an RTI application on 22.10.2020, but the reply received on 28.10.2020 cited impediments to the investigation as the reason for non-disclosure. This led the petitioner to approach the Court, arguing that the action was arbitrary and Section 83 of the CGST Act does not justify freezing a third party’s account. The petitioner referenced judgments from Special Civil Application No. 13132 of 2019 (Valerius Industries Vs. Union of India) and the Bombay High Court case (Kaish Impex Pvt. Ltd. Vs. Union of India and others). The petitioner sought a writ to quash the attachment order and direct the defreezing of his account. A court notice was issued on 22.12.2020, and in response, the respondents, represented by Deputy Commissioner Rahul Dhingra, claimed that the case involved bogus invoices and refund claims by M/s. Belluxa Trading Company, which was found non-existent. A sum of Rs.48,25,000 from the fraudulent refunds had been transferred to M/s. Global Corporation’s account. Consequently, the Rajkot Branch of the Central Bank of India was instructed to withhold this amount pending investigation. The respondents also cited a similar case (Special Civil Application No.16437 of 2020, Piyush Shamjibhai Vasoya vs. Union of India) where proceedings under Section 83 were quashed. The respondents argued that recovery under Section 79 of the CGST Act, 2017, was justified due to fraud, willful misstatement, and suppression of facts under Section 29(2)(e). A show cause notice was issued on 24.11.2020, followed by an Order in Original on 11.12.2020, addressed to M/s. Belluxa Trading Company, but the correspondence was returned.

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