Facts of the Case

The petitioner, a partner in the partnership firm Darshan Sagar Developers, challenged the attachment of three of his personal bank accounts (in HDFC Bank, State Bank of India and Andhra Bank), effected through a notice to a third person in Form GST DRC-13 dated 02.12.2022 under Section 79(1)(c)(i) of the Maharashtra Goods and Services Tax Act, 2017. Two of the three accounts (HDFC and SBI) had already been permitted to be operated, leaving only the Andhra Bank account attached. The attachment followed a show cause notice dated 13.06.2022 issued to the firm under Section 73 of the MGST Act, which the firm/petitioner never replied to; an order dated 18.08.2022 subsequently confirmed a demand of Rs.1,08,95,158/- in tax, Rs.1,13,60,018/- in interest under Section 50, and Rs.10,89,516/- as penalty under Section 73(9) -- a total of Rs.2,33,44,692/- -- communicated via Form GST DRC-07.

Issues Involved

  1. Whether the petitioner, as a partner of the defaulting firm, could challenge the recovery/attachment action directly by writ petition rather than through the statutory appeal process.
  2. Whether the remaining attachment on the Andhra Bank account should be lifted.

Petitioner's Arguments

  • The primary grievance was the attachment of the petitioner's personal bank accounts in his capacity as a partner of the firm, pursuant to the Form GST DRC-13 notice.

Respondent's Arguments

  • The show cause notice dated 13.06.2022 to the firm was never replied to, leading to confirmation of the substantial demand under Section 73 of the MGST Act via the order dated 18.08.2022 and Form GST DRC-07 dated the same date.

Court Order / Findings

  • The appropriate remedy for the petitioner, if aggrieved by the adjudication order and demand, lay in pursuing the statutory recourse available under the MGST Act, not through this writ petition.
  • The two already-released bank accounts remained released; as for the still-attached Andhra Bank account, the Court left it subject to further orders in any proceedings the petitioner might adopt, without lifting it itself.
  • The petition was disposed of in these terms, keeping open all contentions of both sides, with no costs.

Important Clarification

The Court did not examine or rule on the correctness of the underlying tax demand of over Rs.2.33 crore, nor did it order release of the remaining attached account -- it simply directed the petitioner to the statutory appellate route under the MGST Act. Taxpayers facing similar third-party bank attachment under Form GST DRC-13 following an unanswered Section 73 show cause notice should note that responding to the original SCN is the more effective safeguard than a subsequent writ challenge to the attachment.

Sections Involved

  • Maharashtra Goods and Services Tax Act, 2017 – Section 73 (demand for tax not paid/short paid), Section 50 (interest), Section 79(1)(c)(i) (recovery by attachment via notice to a third person)

Decision – In Favour of

Respondents (State of Maharashtra) – the petition was disposed of without disturbing the demand or the remaining attachment; the petitioner was relegated to the statutory remedy.

Case Details

Court: High Court of Judicature at Bombay, Civil Appellate Jurisdiction
Case Number: Writ Petition No. 1145 of 2023
Coram: Justice G.S. Kulkarni and Justice Jitendra Jain
Date of Order: 31 July 2023

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