HC Quashes Bank Attachment for Lack of Reasons in GST Case

Case Details: Bajaj International Realty (P.) Ltd. vs. State of Maharashtra [2026] 184 taxmann.com 142 (Bombay)

Judiciary and Counsel Details

• G. S. Kulkarni & Aarti Sathe, JJ.
• V. Laxmikumaran, Shanmuga Dev & Sriram Sridharan for the Petitioner.
• Himanshu Takke, AGP for the Respondent.

Facts of the Case

The petitioner, a real estate developer undertaking redevelopment of a co-operative housing society, executed a project involving free handover of flats to members and sale of remaining flats. During the investigation into alleged tax evasion on such free handovers, it denied liability, accepted minor discrepancies, and filed detailed objections to the pre-show cause notice; however, the jurisdictional officer under the GST provisionally attached its bank accounts and rejected objections filed in Form DRC-22A without assigning reasons, followed by a subsequent attachment. It was contended that such non-speaking rejection violated statutory requirements and principles of natural justice. The matter was accordingly placed before High Court.

High Court Held

The High Court held that Section 83 of the CGST Act, read with Rule 159 of the CGST Rules, mandates a reasoned order while dealing with objections to provisional attachment. It was observed that failure to record reasons, despite detailed objections, amounted to a breach of a statutory duty and a denial of effective hearing, rendering the action unsustainable. The Court held that the jurisdictional officer under GST must apply mind and provide cogent reasons while confirming or rejecting attachment. Accordingly, the impugned attachment and rejection orders were quashed, and the matter was remanded for a fresh decision after granting a proper hearing.

List of Cases Reviewed

• Radha Krishan Industries v. State of Himachal Pradesh [2021] 127 taxmann.com 26/86 GST 665/48 GSTL 113 (SC) (para 14)
• Originative Trading (P.) Ltd. v. UOI [2022] 136 taxmann.com 144/91 GST 329/65 GSTL 144 (Bombay) (para 14), followed

List of Cases Referred to

• Radha Krishan Industries v. State of Himachal Pradesh [2021] 127 taxmann.com 26/86 GST 665/48 GSTL 113 (SC) (para 11)
• Originative Trading (P.) Ltd. v. UOI [2022] 136 taxmann.com 144/91 GST 329/65 GSTL 144 (Bombay) (para 12).