Order Date – 11 May 2023

Parties: J. L. Enterprises Vs Assistant Commissioner, State Tax, Ballygunge Charge.

Facts – 

• The Petitioner, J. L. Enterprises, is a partnership firm. On an investigation it was found that Mobile phones exported has found to be activated in Indian territory after the date of EGM, therefore, it is a false export.
• Subsequent to issue of a show cause notice in DRC-014, the respondent issued a notice to the banker of the petitioner’s firm to provisionally attach the cash-credit facility of the said firm.
• It is submitted by the petitioner that cash-credit facility is not a debt and it is not provisionally attached under Section 83 of the CGST Act and rules made thereunder.

Issue – 

• Whether the provisional attachment of Bank account is in order?

Order – 

• The Single Bench of Hon’ble High Court observed that the cash-credit facility is also a bank account issued by the bank in favour of the petitioner wherefrom the petitioner is using credit facility for the purpose of his business. It is found from the record of the case that even the petitioner has been paying GST from the said cash-credit account. 
• Be that as it may, it is held by this Court that cash-credit facility is not a debt and therefore, it cannot be made attachable
• The Supreme Court held that the High Court will not ordinarily entertained a petition under Article 226 of the Constitution of India, if an effective remedy is available to the aggrieved person and that this Rule applies with greater rigour in matters involving recovery of public money and the dues of the bank and other financial institutions.
• In the instant case, it relates to recovery of GST. Subsection 5 of Section 159 clearly gives adequate power to the petitioner to file objection for releasing the bank account or, in the instant case cash-credit facility.
• Thus, the writ petition dismissed.