GST Update
???? Desk of CA. Praveen Sharma – 1118 Series (CAPS) ????
Bombay High Court IN THE CASE OF 1Pay Mobileware Private Limited v. Union of India & Ors.
?? 1Pay Mobileware Private Limited v. Union of India & Ors.
Outcome: In favour of the petitioner
Company involved: 1Pay Mobileware Private Limited, an RBI-authorised payment aggregator, challenged attachment of its current and escrow bank accounts.
Department’s allegations: DGGI suspected that fictitious merchants used the company’s platform to route funds connected with online gaming and GST evasion.
Section 83 safeguards: Provisional attachment requires tangible material establishing why attachment is necessary to protect Revenue.
Vague attachment orders: The orders failed to identify specific transactions, the manner of GST evasion or the company’s alleged involvement.
No demonstrated GST liability: The material did not establish the petitioner’s GST liability or the statutory basis for attaching its accounts under Section 83.
Affidavit cannot fill gaps: Deficiencies in the attachment orders could not be cured through subsequent affidavits-in-reply.
Escrow funds protected: Money collected for merchants and beneficiaries was held in trust and did not belong to the company; these funds could not be attached in the circumstances.
Binding precedent applied: Following Radha Krishan Industries, the Court stressed that suspicion alone cannot support this extraordinary power.
Final relief: The Court quashed the provisional attachment orders and subsequent orders continuing the attachments, granting relief to 1Pay Mobileware Private Limited.
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