LI Network
Published on: 14 August 2023 at 23:27 IST
In a startling revelation of abuse of power, the honorable Delhi High Court has recently directed the removal of a debit freeze on a taxpayer’s bank account, bringing to light an unauthorized action by a Superintendent. This incident has raised concerns about the misuse of authority within the GST (Goods and Services Tax) authorities, triggering a debate on the need for stricter accountability measures.
Under the GST law, the power to issue an order for freezing a bank account rests solely with the Commissioner. This authority can only be exercised if the Commissioner is convinced that such a measure is necessary to safeguard the interests of revenue. However, in this particular case, the order to freeze the bank account was issued by a Superintendent, a clear violation of the established protocol. Adding to the gravity of the situation, the necessary form DRC-22, required to legitimize such an action, was conspicuously absent.
The freezing of a bank account or any assets belonging to a taxpayer is considered a severe step that can have far-reaching consequences on the individual’s business operations. This concern was recently echoed by the honorable Supreme Court in the case of Radha Krishan Industries vs. State of Himachal Pradesh.
The Supreme Court emphasized that such extensive powers should only be exercised when absolutely necessary. However, it seems that this prudent advice went unheeded by the involved officer, who proceeded with the order without the required legal authority.
In response to the unfortunate situation, the affected taxpayer sought relief by approaching the Commissioner. Astonishingly, the Commissioner failed to respond to the application, despite the fact that no such order was issued by him in the first place. This glaring lack of concern raises questions about the accountability and responsibility of the Commissioner’s office in investigating such instances of misuse of power.
It is evident from the sequence of events that an individual within the Commissioner’s office abused their position to issue an unauthorized order. The failure to rectify this error and take corrective action further raises concerns about the system’s ability to address such issues internally.
Finally, after a prolonged period of suffering, the honorable Delhi High Court intervened by ordering the defreezing of the bank account in question. This decision was made on July 31, 2023, over a year after the bank account had been frozen on March 25, 2022. Interestingly, Section 83 of the GST law stipulates a maximum freeze duration of one year. However, this duration seems to apply only to legally sanctioned orders, further highlighting the gravity of the situation.
In an unexpected turn of events, the officer responsible for the unauthorized freeze has been penalized with a meager fine of Rs. 5,000, without any consequential action taken against the Commissioner. This outcome raises concerns about the effectiveness of the penalty in deterring future abuses of power and highlights the need for more stringent repercussions.
This incident serves as a stark reminder that abuse of power within government agencies can have serious repercussions, not only for the affected individuals but also for the integrity of the system as a whole. Calls for increased transparency, accountability, and oversight within the GST authorities are likely to grow louder as citizens demand a just and fair system that respects the rule of law.
