Order Date – 15 July 2022

Facts – 

• The Petitioner, Zuric Traders, bank account had been frozen by the respondents by issuing a letter to the bank under section 83 of the CGST Act, 2017.
• It was alleged by since the communication was never served and the information received did not disclose that the action had been taken under Section 83 of the 2017 Act, no objections could be filed and consequently, the principles of natural justice were, infracted.
• As per petitioner, no proceedings, as contemplated under Section 83 of the 2017 Act, have been commenced against him. Therefore, it was contented that the action is violative not only of the provisions of Section 83 of the 2017 Act, but also Rule 159(5) of the 2017 Rules.

Issue – 

• Whether blocking order which was triggered by the respondents/ revenue via the impugned communication is tenable?

Order –

•  The Court observed that the blocking order does not comply with the jurisdictional prerequisites which are embedded in Section 83 of the CGST Act.
• Section 83 also required the respondents to form an opinion that provisional attachment was necessary to protect the interests of the revenue and since the communication was never served and the information received did not disclose that the action had been taken under Section 83 of the 2017 Act, no objections could be filed and consequently, the principles of natural justice were, infracted.
• Relying on M/s Radha Krishan Industries v. State of Himachal Pradesh & Ors. (2021) the court held that since, no proceedings had been initiated on the date when the impugned communication was issued to the petitioner under any of the above aforementioned provisions, the impugned order was issued without jurisdictional facts being present.
• Therefore, the petition was allowed and bank account was unblocked.