Case Note & Summary
The writ petition was filed by a payment aggregator challenging the provisional attachment of its bank accounts under the Central Goods and Services Tax Act, 2017. The petitioner claimed that the attachment was unjustified and that it had been cooperating with the investigation. The respondents alleged that the petitioner was involved in GST evasion through an organized online money gaming syndicate and had failed to maintain necessary records. The court noted that the petitioner was incorporated in January 2019 and had received authorization from the RBI to operate as a payment aggregator. The provisional attachment orders were issued on August 10, August 24, and August 28, 2026, under Section 83 of the CGST Act. The petitioner argued that the attachment was without jurisdiction and that it had provided details of its legitimate operations involving government entities. However, the respondents contended that the petitioner had not cooperated with the investigation, as its business premises were found locked and no documents were available. The court analyzed the submissions and found that the provisional attachment was necessary to protect government revenue due to the serious allegations against the petitioner. The court ultimately upheld the provisional attachment while allowing for the unfreezing of transactions related to certain government entities. The decision emphasized the need for the petitioner to comply with the investigation and the importance of protecting revenue in cases of suspected GST evasion.
Headnote
A) Constitutional Law - Writ Jurisdiction - Provisional Attachment - Validity of Provisional Attachment Orders - Central Goods and Services Tax Act, 2017, Section 83 - The petitioner challenged the provisional attachment of its bank accounts, arguing jurisdictional defects. The court held that the attachment was justified based on the ongoing investigation into GST evasion, and the petitioner failed to cooperate with the investigation (Paras 20-22). B) Taxation - GST Evasion - Role of Payment Aggregator - Central Goods and Services Tax Act, 2017, Section 83 - The court found that the petitioner, as a payment aggregator, was implicated in facilitating GST evasion through fictitious merchants. The provisional attachment was deemed necessary to protect government revenue (Paras 5.1-5.10).
Issue of Consideration
Whether the provisional attachment of the petitioner's bank accounts under Section 83 of the CGST Act was valid and justified.
Final Decision
The court upheld the provisional attachment of the petitioner's bank accounts under Section 83 of the CGST Act, finding it necessary to protect government revenue due to ongoing investigations into GST evasion. The court allowed for the unfreezing of transactions related to certain government entities while maintaining the attachment for other accounts.
Law Points
- Provisional attachment
- jurisdictional defects
- GST evasion
- payment aggregator
- investigation procedures
