Facts of the Case: The Petitioner challenged orders issued by the Deputy Excise & Taxation Commissioner (ST), Gurgaon North, attaching its bank accounts. The action arose from an adjudication order dated 2.4.2025 against M/s Wings Operations & Technology India Pvt. Ltd., promoted by the same directors, for allegedly availing ineligible ITC and claiming erroneous refunds, resulting in a confirmed demand under Section 74 of the CGST/HGST Act, 2017 with interest and penalty.

M/s Wings Operations & Technology India Pvt. Ltd. filed an appeal on 15.4.2025 before the Appellate Authority, Gurgaon, under Section 107 of the CGST Act along with the mandatory pre-deposit as per Section 107(6). Despite the appeal and deposit, the respondent attached the petitioner’s bank accounts alleging that the petitioner was a newly incorporated entity to evade the tax demand.

Issue: Whether the provisional attachment of the petitioner’s bank accounts under Section 83 of the CGST/HGST Act, 2017 is sustainable when the original company has filed an appeal with mandatory pre-deposit. Whether a newly incorporated entity with common directors can be proceeded against for liabilities of the original company. Whether the Delhi High Court has territorial jurisdiction since the petitioner is registered in Delhi though the attachment orders were passed by Haryana authorities.

Held that: The Court noted that Section 107(7) provides an automatic stay of the recovery of the balance demand upon filing of an appeal with the prescribed pre-deposit.

Since the respondent admitted that an appeal was filed and pre-deposit made, there was no justification to maintain the attachment of the petitioner’s bank accounts.

The Court took note of the allegations regarding incorporation of a new entity to evade tax but held that these were matters to be examined in the pending appeal and by the adjudicating authorities; provisional attachment could not continue in the face of statutory appeal.

On territorial jurisdiction, the Court relied on Arramva Corporation v. ADG (Calcutta HC), holding that attachment of bank accounts within the jurisdiction gives rise to part of the cause of action; thus, the writ petition was maintainable.

Impugned orders were set aside, and the petitioner was allowed to operate its bank accounts.

Case Name: Benito Operations And Technologies Pvt. Ltd. Versus Deputy Excise And Taxation Commissioner ST Gurgaon North. dated 18.08.2025

To read the complete judgment 2025 Taxo.online 1990