Bank Account Attachment Upheld for TSP Aiding Gaming Payouts Without Due Diligence | HC

Case Details: Buckbox Infotech (P.) Ltd. vs. Director General of GST Intelligence - [2026] 185 taxmann.com 62 (Gujarat)

Judiciary and Counsel Details

• A.S. Supehia & Pranav Trivedi, JJ.
• Jay S. Shah & Vijay H. Patel for the Petitioner.
• Neel P. Lakhani & Tirth Nayak for the Respondent.

Facts of the Case

The petitioner, a GST-registered technology service provider (TSP) filed a writ petition challenging the provisional attachment of its bank accounts and seeking de-freezing thereof, contending that it had acted as a TSP for Digihub by facilitating payouts through its current account with virtual accounts, and that such attachment was unjustified. The Department of Revenue submitted that Digihub was under investigation for tax evasion in gaming and betting activities, and that the petitioner’s accounts were used for routing payouts to beneficiaries. The petitioner had admitted that it had not verified the credentials or business activities and had relied solely on an undertaking, without conducting any independent verification. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that provisional attachment of bank accounts under Section 83 of the CGST Act, read with Rule 159 of the CGST Rules, was justified in the facts of the case, as the material on record clearly established that Digihub had utilised the petitioner’s platform and bank accounts for routing gaming or betting-related payouts. The Court held that the petitioner had admittedly failed to verify the credentials and nature of the business, and mere reliance on an undertaking was insufficient due diligence. Considering the magnitude of transactions and the ongoing investigation involving multiple linked accounts, the exercise of powers by the jurisdictional officer under CGST. Accordingly, the request to de-freeze bank accounts was rejected, and the writ petition was dismissed.