Provisional Attachment Upheld: Writ Petition Dismissed for Suppression of Material Facts (DGGI Investigation & Non-Existent Premises); Statutory Remedy u/r 159(5) Must be Exhausted

ISSUE

Whether a Writ Petition challenging the freezing of a bank account is maintainable when the petitioner conceals material facts regarding an ongoing DGGI investigation and the non-existence of their business premises, and fails to utilize the statutory remedy of filing objections under Rule 159(5) against the provisional attachment order issued under Section 83.

FACTS

The Freeze: The petitioner challenged the freezing of their bank account for the period 2024-25, claiming that no notice or order was served upon them.
Department’s Defense: The Department revealed that the petitioner had availed substantial Input Tax Credit (ITC) during 2024-25 and was under active investigation by the DGGI (Directorate General of GST Intelligence).
The Attachment Order: The Bank placed on record a formal Provisional Attachment Order (form DRC-22) issued by the Commissioner under Section 83 to protect revenue interests.
Field Verification: A physical inspection by the tax authorities revealed that the petitioner’s registered business premises was non-existent, raising serious doubts about the genuineness of the business.
Suppression: The Court noted that the petitioner had deliberately omitted these crucial facts (investigation, high ITC claim) in the writ petition.

HELD

Concealment of Facts: The High Court held that the petitioner approached the Court with unclean hands by suppressing material facts regarding the DGGI investigation and the nature of ITC availment. This concealment alone justified the refusal to interfere.
Alternate Remedy: The Court emphasized that Rule 159(5) of the CGST Rules provides a specific statutory remedy: the taxpayer can file an objection before the Commissioner/Proper Officer seeking lifting of the attachment. The petitioner failed to exhaust this remedy.
Valid Attachment: Given the “non-existent” premises and high ITC risk, the provisional attachment under Section 83 was deemed a necessary measure to protect revenue.
Verdict: The Writ Petition was dismissed with costs. The petitioner was granted liberty to file objections before the Proper Officer in accordance with the law. [In Favour of Revenue]

KEY TAKEAWAYS

Clean Hands Doctrine: Never hide facts from the High Court. If you are under investigation or your premises were found closed, disclose it. Suppression leads to immediate dismissal, often with heavy costs.
Rule 159(5) is the First Step: If your bank account is attached, do not rush to file a Writ. First, file a formal objection under Rule 159(5) within 7 days. The Commissioner is legally bound to decide this objection and pass a speaking order. Only if that order is rejected should you approach the Court.
Section 83 Power: This section gives the Commissioner draconic powers to attach property (including bank accounts) during the pendency of proceedings if they believe revenue is at risk. “Non-existent premises” is the strongest ground for them to invoke this.

HIGH COURT OF DELHI

Aashish

Directorate General of GST Intelligence (DGGI) HQRS.^*

PRATHIBA M. SINGH and SHAIL JAIN, JJ.

W.P.(C) No. 16680 of 2025

NOVEMBER 19, 2025

Udit Bakshi, Bhwesh Bhola and Piyush Kumar, Advs. for the Petitioner. Anurag Ojha, SSC, Dipak Raj, Ayushman, Ms. Rashmi, Advs. and Rajeev Tomar, IO for the Respondent.

ORDER

Prathiba M. Singh, J.- This hearing has been done through hybrid mode.

2. The present petition has been filed by the Petitioner under Article 226 of the Constitution of India, inter alia, challenging the attachment of the Petitioner’s bank account bearing no. 259560519588, which is maintained in the IndusInd Bank, Rajouri Garden Branch.

3. The case of the Petitioner is that the said account had been frozen at the instructions of the Directorate General of GST Intelligence, Gurugram Zonal Unit (hereinafter “DGGI”). The submission of Mr. Udit Bakshi, ld. Counsel for the Petitioner is that the Petitioner has not been provided any order or notice in respect of the said action of the DGGI. The Petitioner became aware of the same from its bank on 1st October, 2024. It is further submitted that more than one year has lapsed, however, neither the account has been de-freezed nor has any notice been issued to the Petitioner.

4. On the last date of hearing, i.e., 6th November, 2025, this Court proceeded on the basis that under Section 83 of the Central Goods and Services Tax Act, 2017 (hereinafter, ‘CGST Act’) the freezing order is valid only for a period of one year and had directed Mr. Anurag Ojha, ld. Sr. Standing Counsel to obtain instructions from the DGGI. Notice was also issued to the Bank. Relevant portion of the said order dated 6th November, 2025 reads as under:

“5. In terms of Section 83 of the Central Goods and Services Tax Act, 2017 such freezing of the bank account is valid only for a period of one year.

6. Issue notice. None appears for the DGGI. Mr. Ojha, ld. Senior Standing Counsel who regularly appears for DGGI is requested to accept notice.

7. Let notice be issued even to Respondent No. 2 IndusInd Bank.

8. Let both the Respondents revert with instructions on the next date.”

5. Today, Mr. Anurag Ojha, ld. Sr. Standing Counsel has obtained instructions and has produced the original file of the Department which shows that Mr. Ashish is working under the name ‘STEELMART INDIA’ and for the year 2024-25 there is a substantial Input Tax Credit (hereinafter, ‘ITC’) which has been availed by the Petitioner running into crores of rupees. In respect of the same, the DGGI has started investigation and summons were issued under Section 17 of the CGST Act. The statement of the Petitioner has also been recorded on 13^th May, 2025.

6. The writ petition is bereft of any of these facts. Ms. Rashmi, ld. Counsel appearing for the Bank has placed on record the freezing order dated 1^st October, 2024 which records that debit over and above Rs.1939.66 lakhs only shall be allowed. The said provisional attachment order is extracted below:

“It is to inform that M/s. Steelmart India, having principal place of business at Plot At Kh No-27/1 & 24/2 Min, MasoodabadTeshil Road, Najafgarh, New Delhi-110043, New Delhi, South West Delhi, Delhi, 110043, bearing registration number as GSTIN 07CSUPA0997G1ZC, PAN-CSUPA0997G, is a registered taxable person under the CGST/SGST Act, 2017. Proceedings have been launched against the aforesaid taxable person under Section 67 and Section 74 of the said Act to determine the tax or any other amount due from the said person. As per information available with the department, it has come to my notice that the said person has a bank account no. 259560519588 in your bank.

M/s. Steelmart India, appears to be involved in GST evasion of approx. Rs. 1939.66 Lac. In order to protect the interest of revenue and in exercise of power conferred under Section 83 of the CGST Act, 2017. I, Dinesh Kumar Gupta, Additional Director General, hereby provisionally attach the aforesaid account.

Accordingly, debit over & above Rs. 1939.66 Lac shall only be allowed from the said account or any other account opened with the same PAN (other than CC/OD account). Further, the present credit balance details, Bank Account Statement till date, KYC Documents and other instruments held by the said party may also please be forwarded to this office on dggi.gzu@gov.in.”

7. Moreover, the physical inspection report of the premises also reveals that the premises of the Petitioner was non-existent. The findings in the physical inspection report is set out below:

“As directed, visit under Section 67 (1) of the CGST Act, 2017 was made at the principal place of business of M/s Steelmart India (GSTIN-07CSUPA0997G1ZC), Plot No. at KH No-27/1 & 24/2 Min, Masoodabad Tehsil Road, Najafgarh, South West Delhi, Delhi, 110043 on 30.08.2024.

Upon reaching the proximity of Masoodabad Industrial Area, Najafgarh, New Delhi, the premises of M/s Steelmart India (GSTIN-07CSUPA0997GIZC), Plot No. at KH No-27/1 & 24/2 Min, Masoodabad Tehsil Road, Najafgarh, South West Delhi, Delhi, 110043 was searched/located rigorously, but the said address could not be traced/located.

After that, Sh. Aashis, the proprietor of M/s Steelmart India, was called at 11:30 AM approx, at the registered mobile No. 9560519588, available at GST portal. After multiple calls, Sh. Aashish picked up the call and Sh. Aashish was informed about the purpose of visit. Then-after, Sh. Aashish, assured that he is coming in 30 mins at the premises of M/s Steelmart India. After 30 mins, he was called again, but he did not pick up the call, then-after he was called multiple times, but he did not pick up the calls. Many persons, who are proprietors, workers or working there, were enquired about the said address of name of M/s Steelmart India, but non of them was aware about the name or address of this firm.

In view of above facts, it appears that M/s Steelmart India (GSTIN-07CSUPA0997G1ZC), Plot No. at KH No-27/1 & 24/2 Min, Masoodabad Tehsil Road, Najafgarh, South West Delhi, Delhi, 110043 is non-operational at the address at the time of visit.

Hence, Authorisation for Inspection under Section 67(1), dated 29.08.2024, bearing CBIC-DIN-202408adgEE00000EDIC, could not be executed at the above mentioned premises.”

8. Mr. Rajeev Tomar, the concerned Investigating Officer from the DGGI, is also present in Court and he submits that he had gone for physical inspection of the premises of the Petitioner and found that the premises itself was not existing. In the opinion of this Court, there is more than what meets the eye in the matter. There is concealment of material facts in the present case. There is not a whisper of the DGGI investigation, the amount of ITC fraudulently availed of, etc., in the writ petition, despite the Petitioner having complete knowledge of the same. In respect of the freezing order, the Petitioner can always file objections with the Department under Rule 159(5) of the CGST Act.

10. Accordingly, the writ petition is dismissed with costs of Rs.1,00,000/-to be deposited within two weeks with the Delhi High Court Staff Welfare Fund. The bank details of the Delhi High Court Staff Welfare Fund is as under:

Name: Delhi High Court Staff Welfare Fund

Account No: 15530110074442

Bank and Branch: UCO Bank, Delhi High Court

11. The Original file is returned to the Investigating Officer.

12. The DGGI and the GST Department are free to proceed in accordance with law against the Petitioner. If the Petitioner wishes to file objections under Rule 159(5), it may do so, in accordance with law. If such a representation is filed, the same shall be considered and decided by the Department.

13. List for compliance on 22^nd December, 2025.