In W.P.(C) 3209/2023-DEL HC- Recourse to Sec.107(2) of CGST Act may be necessary if Adjudicating Authority has adjudicated any contentious issue, which in Commissioner’s opinion requires to be reviewed: Delhi HC
Justices Vibhu Bakhru & Amit Mahajan [16-03-2023]



Tulip Kanth


New Delhi, March 25, 2023:  While considering a case where the petitioner had asked for unblocking the bank account in respect of the amount relating to the refund sanctioned and credited in the petitioner's bank account, the Delhi High Court has directed the Authority to reconsider the petitioner’s request for lifting of the block placed on the bank account.


“Section 73 and 74 of the Act also provide for recovery of refund where the same has been erroneously granted”, the Division Bench of Justice Vibhu Bakhru and Justice Amit Mahajan asserted.


The petitioner stated that the said refund had been granted by an order. Thereafter, the said order was subject to an audit and a review, pursuant to which the petitioner was directed to deposit a sum of Rs 38,786 as an amount erroneously refunded.


The petitioner stated that it has voluntarily deposited the said amount of Rs 38,786 as directed. However, notwithstanding that the petitioner has complied with the said direction, the balance amount of the refund granted by the respondent continued to be blocked.


The petitioner had contended that it was not open for the respondents to indefinitely block the petitioners bank account and in the event, the respondent found that the order of refund was erroneous or required review, the respondent would have taken recourse to Section 107(2) of the Central Goods and Services Tax Act, 2017.


The Bench clarified that if the respondents were of the view that the refund had been erroneously granted,then  they were required to take appropriate action under Section 73 or 74 of the Act.


“Recourse to Section 107(2) may be necessary only if the Adjudicating Authority has adjudicated any contentious issue, which in the opinion of the Commissioner requires to be reviewed”, the Bench said.


Insofar as the blocking of the bank account was concerned, the Bench noted that the said action is taken under Section 83 while also stating, “By virtue of sub-section (2) of Section 83 of the Act, the said order of attachment ceases to be operative on expiry of a period of one year from the date of the order. The respondents are required to adhere to the said discipline.”

Considering the averment that the auditor had already reviewed the petitioner’s case and directed refund for the sum of Rs 38,786, the Bench considered it apposite to direct the respondent to reconsider the petitioner’s request for lifting of the block placed on the petitioner’s bank account and continue the same only if it is satisfied that the conditions as specified in Section 83 of the Act continue to exist.

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