M/S. SRI SAI BALAJI ASSOCIATES VERSUS THE STATE OF ANDHRA PRADESH

Order date : 07 March 2023 

Facts 

• The Petitioner’s, SRI SAI BALAJI ASSOCIATES, customer was issued notice under Section 70 (1) of CGST Act to stop all further payments, which the Petitioner he ought to receive from them. 
• Petitioner contended that though the 3rd respondent in terms of Section 70 (1) of G.S.T Act, has power to summon any person whose attendance is considered necessary either for giving evidence or producing a document or any other thing in any inquiry in the same manner, however that power is not extended to direct the summoning of a party to stop all further payments, which he ought to receive from the customers.

Issue: 

• Whether Petitioner’s Customer can be directed to stop payment to the Petitioner ? 

Order : 

• The Court observed that under Section 70(1) of GST Act the proper officer cannot exercise powers to direct the summoning party to stop payment to the assessee which is beyond the scope of 70 (1) of GST Act. Of course, under Section 83 of GST Act, if the Commissioner is of the opinion that for the purpose of protecting the government revenue, he may by order provisional attachment of any property including bank account belonging to the taxed person or any person specified in Sub Section 1 (A) of Section 122 in such manner as prescribed.
• The impugned notice was issued under Section 70 (1) of GST Act but not in exercise of powers conferred under Section 83 of GST Act.
• Thus, it was held that the 3rd respondent has exceeded his power in directing M/s. Sterlight Technologies Limited to stop further payments to the petitioner herein. Therefore, such a direction is beyond the jurisdiction of the 3rd respondent. 
• Hence, the same was set aside to that extent.