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2.3 The petitioner is regular in filing its C/SCA/10780/2022 JUDGMENT DATED: 01/02/2023 return under the Act both annually and periodically.
2.4 During the period between 2018-19, the petitioner company had purchased Iron and Steel Waste Scrap from M/s.Arsh Enterprise, which has having valid GST registration at the time of purchase of goods. The goods worth Rs.37,31,420/- had been purchased where the value of goods was of Rs.31,53,746/- and the GST was Rs.5,67,674/-. The goods purchased from M/s.Arsh Enterprise also had been sold by the petitioner to various other purchasers and the sale proceeds were received in his Bank account. The GST registration of M/s.Arsh Enterprise had been cancelled on 31.10.2020.

4. On issuance of the notice, appearance has been filed and affidavit-in-reply has also been brought on the record.

4.1 According to the respondent, the petitioner had purchased the goods from M/s.Arsh Enterprise as per its returns filed for the year 2018-19 and 2019-20. Directorate General of Goods and Service Tax Intelligence, Surat Zonal Unit, had C/SCA/10780/2022 JUDGMENT DATED: 01/02/2023 gathered the intelligence that M/s.Arsh Enterprise having its place of business at Surat was involved in wrongfully availed and utilizing the Input Tax Credit without any actual receipt or supply of goods. Hence,the search was conducted at the office premises of M/s.Arsh Enterprise and relevant documents were seized. The panchnama was also recorded on 09.04.2019. 4.2 The show cause notice was issued for the purpose of cancellation of registration of M/s.Arsh Enterprise on 16.10.2020 on the ground that M/s.Arsh Enterprise had obtained the registration by means of fraud, willful mis-statement and by suppression of facts. The proprietor of M/s.Arsh Enterprise was required to remain C/SCA/10780/2022 JUDGMENT DATED: 01/02/2023 personally present before the authority and he did remain present.

4.3 It is the say of the respondent that 40 business entities as per the report of intelligence had passed on Input Tax Credit amounting to Rs.6.03 Crore (rounded off) during the period from April 2018 to June 2019 to M/s.Arsh Enterprise and most of these entities were bogus. On verification, it was noticed that M/s.Arsh Enterprise had wrongly availed and utilized the Input Tax Credit amounting to Rs.6,03,77,363/-. 4.4 M/s.Arsh Enterprise being the supplier of goods to the petitioner and since it was found to have availed the Input Tax Credit wrongly without any actual supply of goods and the registration also has been C/SCA/10780/2022 JUDGMENT DATED: 01/02/2023 cancelled by means of fraud and by willful misstatement. The respondent authority issued a summons under section 70(1) of the Act intimating the proprietor of petitioner firm to give a statement on 04.01.2022 and produce the sale and purchase registers along with purchase invoices from effective date of GST registration.

9.4 In the given set of circumstances, it can be thus noticed that the proper officer is always required to ensure that there are action of the provisional attachment may not hamper normal business activities of the taxable person. Of course, the summons had been issued against the petitioner after getting the inquiry made against M/s.Arsh Enterprise, the procedure that had C/SCA/10780/2022 JUDGMENT DATED: 01/02/2023 been required to be followed as per the Circular and also on issuance of FORM DRC 01A had not been done before the provisional attachment of the Bank account had been made. There is no explanation as to why the FORM DRC-01A has been issued on 18.01.2023 could not have been done if, it was for ascertaining the preliminary details and for protecting the revenue. 9.5 Noticing, however, the gravity of the matter, when there is a direction for attachment of the Bank account, the Court needs to interfere following the decision of Arya Metacast Pvt. Ltd. (supra) and also various decisions which have been referred to in that decision itself. The guidelines issued by the Circular of CBEC on 23.02.2021 also make it amply clear that C/SCA/10780/2022 JUDGMENT DATED: 01/02/2023 the remedy of attachment being by itself very extra ordinary needs to be resorted to with at most circumspection and maximum care and caution, which in the instant case appear to have been missing and hence, that order needs to be quashed and set aside. At the same time being aware of the inquiry which has been made against M/s.Arsh Enterprise and the purchase having been made by the present petitioner in 2018-19 from M/s.Arsh Enterprise for the goods worth Rs.37,21,420/-.However, striking the balance in wake of the details which have come on record of M/s.Arsh Enterprise it would be apt to release the Bank account by directing the Bank to not permit the petitioner to operate so far as the tax amount of Rs.3,95,568/- for the year 2018- C/SCA/10780/2022 JUDGMENT DATED: 01/02/2023 19 and tax amount of Rs.1,72,104/- for the year 2019-20.