HC set aside notice issued to bank to withhold amount without issuing assessment order

Case Details: Rayan Traders v. Principal Chief Commissioner of GST Central Excise - [2023] 147 taxmann.com 82 (Madras)

Judiciary and Counsel Details

• • Dr Anita Sumanth, J.
  • Senniappan & Hari Babu for the Petitioner.
  • K. Umesh Rao, Jr. Standing Counsel & Rohith for the Respondent.

Facts of the Case

The petitioner was a registered assessee and it filed writ petition to challenge the attachment notice issued to the HDFC Bank. In the impugned notice, the bank was directed to withhold the specified amount and pay the same forthwith to the Government. The department contended that there was a statement made by the petitioner in the course of an enquiry conducted by the Intelligence Officer under Section 70 of the Act.

High Court Held

The Honorable High Court noted that there had been no order of assessment or any other order passed under the applicable provisions making a determination of the specified amount as being ‘due’ from the petitioner. Moreover, the petitioner was neither assessed under Sections 73 or 74, nor had there been any order passed reversing the Input Tax Credit that was claimed by the petitioner. The Court also noted that an enquiry conducted by way of issuing summon can’t substitute a determination of liability under an order of assessment. Thus, it was held that the impugned notice was liable to be set aside.