The court's decision was based on the interpretation and application of the provisions of the Central Goods and Services Tax Act, 2017, particularly regarding the recovery of refunds and the blocking of bank accounts.

JUDGMENT :

Vibhu Bakhru, J.

1. The petitioner has filed the present petition, inter alia, praying that a writ, order or direction be issued to unblock the bank account in respect of the amount of Rs.34,48,080/-, which relates to the refund sanctioned and credited in the petitioner’s bank account. The petitioner also prays that an appropriate direction be issued to the petitioner’s bank to unblock the amount of Rs.34,48,080/-, which has been blocked at the instance of the respondent.

2. The petitioner states that the said refund has been granted by an order dated 05.08.2022. Thereafter, the said order was subject to an audit and a review, pursuant to which the petitioner was directed to deposit a sum of Rs.38,786/- as an amount erroneously refunded.

3. The petitioner states that it has voluntarily deposited the said amount of Rs.38,786/- as directed. However, notwithstanding that the petitioner has complied with the said direction, the balance amount of the refund granted by the respondent continues to be blocked.

4. Ms. Goel, the learned counsel for the petitioner submits that it is not open for the respondents to indefinitely block the petitioner’s bank account and in the event, the respondent finds that the order of refund is erroneous or requires review, it would be necessary for the respondent to take recourse to Section 107(2) of the Central Goods and Services Tax Act, 2017 (the Act).

5. Mr. Singla points out that the petitioner had filed a writ petition captioned Eunike General Trading v. Commissioner of Goods and Service Tax West And Ors. W.P.(C) 16739/2022 seeking similar relief and the same was disposed of by the order dated 15.12.2022.

6. It is relevant to note the prayers made in the said writ petition. The same read as under :

“(a) issue a Writ of Mandamus or Certiorari, or any other appropriate Writ, Order or direction, calling for the papers and proceedings leading to the records relating to blocking of sanctioned refund of Input Tax Credit of the Petitioner to the tune of Rs.3448080/- (Rupees Thirty Four Lakh Forty Eight Thousand and Eighty Rupees) and after looking into the same and the legality thereof, this Hon'ble Court be pleased to quash and set aside the action of Respondents regarding blocking of the sanctioned refund of Input Tax Credit of the Petitioner;

(b) issue a writ of mandamus or any other appropriate writ or direction to direct the respondent no. 4 to unblock the amount of Rs.3448080/- Rupees Thirty Four Lakh Forty Eight Thousand and Eighty Rupees) lying in the bank account of Petitioner.”

7. This Court had, in the order passed on 15.12.2022, noted the respondents’ contention that the action for blocking the petitioner’s bank account had been taken on three grounds. First, that there had been a mismatch in the payment made by the petitioner to the supplier in respect of the goods that are stated to have been exported. Second, there was a doubt as to whether any goods were procured from the supplier in question. And third, that the petitioner had also procured goods from another supplier whose registration was suo motu cancelled.

8. It was also the respondents’ contention that in addition to the input credit of Rs.34,48,080/- a sum of Rs.15 Lacs had been released earlier.

9. Considering the above submissions made by the parties, this Court had directed the freezing of the bank accounts to be confined to Rs.50 Lacs. The operative part of the order dated 15.12.2022 is set out below:

“5. In view of the above, the order issued under Section 83 of the CGST Act, 2017 would be confined to freezing the petitioner’s bank account to the extent of Rs.50 lacs. In another words, the petitioner would not be entitled to withdraw any amount from the bank account till a credit balance of Rs.50 lacs is achieved. The petitioner would be entitled to operate the bank account and withdraw any amount in excess of a credit balance of Rs.50 lacs.

6. Insofar as the reasons for taking an action under Section 83 of the CGST Act is concer