What is the case
● Roshani Sana Jaiswal Vs Commissioner of Central Taxes
● The Delhi High Court has ruled that the authorities cannot seize property, including bank accounts, of people who are not "taxable individuals" under Section 83 of the Central Goods and Services Tax Act.
● The respondent cannot bind any and all land, including bank accounts of persons other than the taxable individual, in order to protect the revenue's interests, the Court has ruled.
● Furthermore, Section 2(107) described a "taxable individual" as someone who is registered or is required to be registered under the CGST Act.
● The Court found that the jurisdictional element of a "taxable individual" under Section 83 was lacking in this case.
Details
● Between 2006 and 2008, the applicant served as a director on the Board of Directors of a company called Milkfood Ltd. The petitioner is also a shareholder in the firm, owning roughly 14.33 per cent of the stock. During the financial year 2019-2020, the applicant was paid a payment of Rs.1.50 crores per annum.
● The respondent began an investigation against Milkfood Ltd. under Section 67 of the Central Goods and Services Tax Act, 2017, based on information obtained that Milkfood Ltd. was claiming Input Tax Credit for fake/ineligible invoices.
● The respondent argues that during the investigation, the statements of those who regulated institutions that enabled Milkfood Ltd. to assert ITC were registered. According to the respondent, the petitioner's "voluntary declaration" was registered on 03.12.2020 in this context.
● According to the respondent, the petitioner acknowledged in her statement to the concerned officer that she served as a director of the firm, Milkfood Ltd., between 2006 and 2008, and that she has been working as a mentor/advisor for the company since then.
● As previously mentioned, the plaintiff acknowledged that she owned a 14.33 per cent equity interest in Milkfood Ltd.
● Since the complainant was aggrieved by the respondent's conduct, she filed this writ petition with this Court. The respondent has filed a counter-affidavit in response to the notice.
Courts Order
● The respondent cannot bind any and all property, including bank accounts of persons other than the taxable individual, in order to protect the revenue's interests."
● The order was issued in response to a petition filed by a former company director who was under investigation under Section 67 of the Act.
● The petitioner was a shareholder in the company and is now working as a "mentor" for it.
● The petition was filed in response to orders from the Commissioner of Central Taxes, GST, who had provisionally attached some of the petitioner's bank accounts.
● The Court first determined that the writ petition under Article 226 was maintainable, ruling that the lack of an alternative solution would not prevent the court from hearing the case.
● "The fact that a litigant has an alternative remedy is a self-imposed restraint on the Court... The Court may, and should, exercise its powers under Article 226 of the Constitution, among other things, in cases where the impugned action or order is without jurisdiction," the Court said.
● "In the absence of such content," the Court concluded, "the impugned action concerning provisional attachment of the petitioner's bank accounts, which is otherwise a "draconian" measure, was unsustainable."
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