Squad 7 Security and Allied Services Vs Senior Intelligence Officer

Heard Mr. Krishna Koundinya, learned Senior Counsel for the petitioner; and Mr. Dominic Fernandes, learned counsel for respondent Nos. 1 and 2.

By filing this petition under Article 226 of the Constitution of India, petitioner has prayed for the following reliefs:

“To declare:

a. the summons issued by the 1st respondent under Section 70 of the Central Goods and Services Tax Act, 2017, on 17.02.2023, 04.05.2023 and 09.05.2023 respectively;

b. the action of the 2nd respondent in provisionally attaching the bank accounts of the petitioner, held with respondent Nos. 3 to 7, under Section 83 of the Central Goods and Services Tax Act, 2017 on 23.05.2023; and

c. the action of the 1st and 2nd respondent in continuously threatening to arrest the Proprietor of the petitioner despite his cooperation all through;

as arbitrary, illegal, high-handed, violative of the principles of natural justice, apart from being violative of Articles 14, 19(1)(g), 21 and 265 of the Constitution of India and to consequently direct the respondents not to arrest the petitioners after raise the provisional attachments of the bank accounts of the petitioner held with respondent Nos. 3 to 7 and to pass such other order or orders as this Hon’ble Court may deems fit, just and proper in the circumstances of the case.”

On 07.07.2023 we had passed the following order:

“Having regard to the grievance expressed by the petitioner, Mr. Dominic Fernandes, learned counsel prays for time till Monday i.e., 10.07.2023 to obtain instruction.

Till Monday i.e., 10.07.2023, we direct that no further coercive steps shall be taken against the petitioner.

List on 10.07.2023.”

On instructions, Mr. Dominic Fernandes submits that this is a case which comes under Section 76 of the Central Goods and Services Tax Act, 2017 (briefly ‘the CGST Act’ hereinafter). Petitioner had collected from several clients/service providers Goods and Services Tax (GST) during the period from 2017-18 to 2022-23. However, the collected amount has not been deposited with the Government. It is for this reason that action has been taken under Section 83 of the CGST Act.

According to him, such amount collected by the petitioner from about 120 clients/service providers would be more than Rs. 19 Crores but as on today, respondents have obtained information from 42 clients/service providers and as per such information, the amount collected by the petitioner as GST amount would be more than Rs. 11 Crores. Petitioner has deposited Rs. 6 Crores. If the petitioner deposits the balance amount, respondents would consider withdrawal of the attachment order.

On the other hand, Mr. Krishna Koundinya, learned Senior Counsel for the petitioner submits that such contentions of learned counsel for respondent Nos. 1 and 2 are beyond the record.

As per order dated 30.06.2023 passed by the 2nd respondent deciding to continue with provisional attachment of the bank accounts of the petitioner, the amount allegedly collected by the petitioner as GST has been quantified at Rs. 11,57,65,812.00. It is not open to the respondents to improve upon such figure and cause prejudice to the petitioner. In any view of the matter, such contention of the respondents is at a stage prior to issuance of show cause notice and adjudication.

Issue notice.

Mr. Dominic Fernandes waives notice for respondent Nos. 1 and 2. Petitioner to serve respondent Nos. 3 to 7 personally and thereafter file proof of service. Respondent Nos. 1 and 2 to file counter affidavit by the next date.

After hearing learned counsel for the parties and on due consideration, we direct that petitioner shall pay a sum of Rs. 2.25 Crores to the GST authorities at Hyderabad within a period of 30 days from today and subject to such deposit, the provisional attachment of the bank accounts of the petitioner maintained with respondent Nos. 3 to 7 would stand suspended.

We make it clear that the above order would in no way interfere with the ongoing investigation carried out by respondent Nos. 1 and 2.

List after a month on 10.08.2023.

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Squad 7 Security and Allied Services

For Reference Visit:
Telangana High Court

Read Another Case Law:
GST Case Law