Siddharth Mandavia v. Union of India and others
[Citation -2020-LL-1103-46]

Citation 2020-LL-1103-46
Appellant Name Siddharth Mandavia
Respondent Name Union of India and others
Court HIGH COURT OF BOMBAY
Relevant Act CGST
Date of Order 03/11/2020
Judgment View Judgment
Keyword Tags attachment of bank account • attachment of property • provisional attachment • recovery proceeding • search warrant • satisfaction • tax credit • input tax credit


Minal Digitally signed by Minal V. Parab V. Date: 2020.11.03 Parab 14:48:42 +0530 WPL2901_20.doc IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION (L) NO.2901 OF 2020 Siddharth Mandavia Petitioner Vs. Union of India and others Respondents Dr. Sujay Kantawala a/w. Mr. P. Choudhari and Mr. Manthan Unadkat i/b. Unadkat & Co. for Petitioner. Mr. Pradeep S. Jetly, Senior Advocate a/w. Mr. J. B. Mishra for Respondents. CORAM : UJJAL BHUYAN & ABHAY AHUJA, JJ. Reserved on : OCTOBER 15, 2020 Pronounced on: NOVEMBER 03, 2020 P.C. : (Per Ujjal Bhuyan, J.) Heard Dr. Sujay Kantawala along with Mr. P. Choudhari, learned counsel for petitioner and Mr. Pradeep Jetly, learned senior counsel along with Mr. J. B. Mishra, learned counsel for respondents. 2. By filing this petition under Article 226 of Constitution of India, petitioner has sought for following reliefs:- 1. for direction to respondents restraining them from adopting any coercive measures without issuing show cause notice to compel petitioner to pay further customs duty and / or goods and services tax (GST) dues which are disputed by petitioner; 2. for direction to respondents to unfreeze 12 bank accounts of petitioner and family members as per details furnished in writ petition including in prayer portion; 3. for direction to respondents to unfreeze Importer Exporter Code No.0314035460 of proprietorship firm 1/18 WPL2901_20.doc of petitioner by name of M/s. XS Components ; and 4. for direction to respondents allowing presence of lawyer of petitioner s choice during investigation (questioning) of petitioner. 3. On 08.09.2020, this Court had issued notice on admission as well on stay while directing respondents to file affidavit. Subsequently affidavit was filed by respondents. 4. On 08.10.2020, interim prayer of petitioner was heard whereafter following order was passed:- 2] Our attention has been drawn to Section 83 of Central Goods and Services Tax Act, 2017 as well as to garnishee notices issued including one at page 195 of Writ Petition. 3] From reading of Section 83, we find that there are two preconditions which must be satisfied before Commissioner can exercise jurisdiction under Section 83. First precondition is pendency of any proceedings under Section 62 or Section 63 or Section 64 or Section 67 or Section 73 or Section 74 of Central Goods and Services Tax Act, 2017. Second precondition is that Commissioner must form opinion that provisional attachment of any property including bank account is necessary for protecting interest of Government revenue. Once these two preconditions are satisfied, Commissioner is required to pass order in writing provisionally attaching any property including bank account belonging to taxable person. 4] From perusal of notice at page 195, we find that it is basically garnishee notice issued to Bank Manager of Indusind Bank. In said notice deponent has mentioned that proceedings have been launched against taxable person i.e. Petitioner under Sections 67 and 74 of Central Goods and Services Tax Act, 2017. But in what manner proceedings have been launched is not discernible. 5] For proper appreciation, we feel that it would be appropriate if Respondents produce before us order passed by Commissioner under Section 83 of Central Goods and Services Tax Act, 2017 in respect of all garnishee notices. 6] Ordered accordingly. 5. Following aforesaid order, additional affidavit on behalf of 2/18 WPL2901_20.doc respondent Nos.5 to 7 was filed on 13.10.2020. 6. interim prayer was finally heard on 15.10.2020 whereafter order was reserved. 7. For proper appreciation of rival contentions vis-a-vis interim relief sought for by petitioner, it would be apposite to briefly narrate relevant facts as projected by petitioner. 8. According to petitioner, he is sole proprietor of proprietorship firm M/s. XS Components which is engaged in business of export of various products, such as, garments, footwear, leather accessories etc. Petitioner holds Importer Exporter Code bearing No.0314035460. 8.1. Petitioner has stated how goods are purchased locally from wholesale traders and thereafter exported out of India through container freight supply terminal at Inland Container Depot, Tuglakabad. Goods are loaded in containers in presence of customs officials who verify and oversee process. Once goods are exported and petitioner receives payment from overseas buyers, payments are made to local suppliers. For goods exported out of India, petitioner claims various export incentives as is permissible in law. 8.2. With regard to export incentives claimed by petitioner, office of respondent Nos.3 and 4 carried out search operations in residence and office premises of petitioner on 11.09.2019 whereafter various documents etc. were seized. Simultaneously, importer exporter code of petitioner was blocked. According to petitioner, search warrant was only in respect of M/s. XS Components; nonetheless, documents belonging to another entity called Evertime Trading Private Limited were also seized. However, seizure memo has not been furnished to petitioner. 3/18 WPL2901_20.doc 8.3. Thereafter summons were issued to petitioner by respondent No.4 on 06.11.2019 seeking certain information pertaining to export incentives claimed by petitioner which was replied to by petitioner on 13.11.2019. Further details were furnished by petitioner to respondent No.4 on 15.11.2019. 8.4. It is stated that on insistence of respondent No.4, petitioner made payment of Rs.30,00,000.00 without prejudice to his rights and contentions vide three demand drafts dated 17.01.2020, 20.01.2020 and 28.01.2020, all drawn in favour of Commissioner of Customs, Tuglakabad. 8.5. Notwithstanding same, importer exporter code of petitioner continued to be blocked. Because of continuing blockage of importer exporter code, petitioner could not receive drawback incentives to tune of Rs.8,51,374.00, Integrated Goods and Service Tax (IGST) refund of Rs.58,00,601.00 and Merchandise Export Incentive Scheme (MEIS) refund of Rs.45,98,702.00. Further, because of such blockage, many export orders received by petitioner from overseas buyers had to be cancelled. 8.6. Parallely respondent Nos.6 and 7 commenced investigation against petitioner s firm vide summons dated 12.02.2020 directing appearance of petitioner on 17.02.2020. In his reply, petitioner expressed inability to appear as he was out of station. When next summons were issued on 21.02.2020, petitioner appeared before respondent No.7 on 28.02.2020 when his statement was recorded. 8.7. Petitioner had gone to Dubai for some business work but got stuck there due to global pandemic and he could not return back. When respondent No.4 made telephonic enquiries on 16.06.2020, petitioner wrote back on same day informing about his stay at Dubai 4/18 WPL2901_20.doc and furnished copies of passport and flight details. 8.8. To utter surprise of petitioner, in month of July, 2020, he was informed by various bank authorities that accounts belonging to him and his family members have been frozen by respondent Nos.6 and 7. Details of bank accounts frozen by offices of respondent Nos.6 and 7 have been disclosed in writ petition, which are extracted hereunder:- Sr. Name of Bank Name of A/c. Holder Account No. No. 1 Karnataka Bank Ltd. XS Component 5102000100132300 2 Indusind Bank Ltd. XS Component 259930200000 3 Kotak Mahindra Bank Ltd. Siddharth P. Mandavia 5111293099 & Mansi Mandavia 4 Kotak Mahindra Bank Ltd. Siddharth P. Mandavia 5111185073 5 Kotak Mahindra Bank Ltd. Mansi Mandavia & 3811295986 Siddharth P. Mandavia 6 Kotak Mahindra Bank Ltd. Hriaan Siddharth 7511305259 Mandavia (Minor) & Siddharth P. Mandavia 7 Kotak Mahindra Bank Ltd. Evertime Overseas Pvt. 2012351880 Ltd. 8 Kotak Mahindra Bank Ltd. E-global Trading Ltd. 4811811701 9 Indusind Bank Ltd. Siddharth P. Mandavia 159920799999 10 Indusind Bank Ltd. Mansi Siddharth 159820756968 Mandavia 11 HDFC Bank Ltd. Hriaan Siddharth 00791460006096 Santacruz (W) Mandavia (Minor) & Siddharth P. Mandavia 12 HDFC Bank Ltd. Mansi Mandavia & 00791000210784 Santacruz (W) Siddharth P. Mandavia 8.9. Aggrieved by above, petitioner has preferred present writ petition seeking reliefs as indicated above. 9. Respondent Nos.5 to 7 have filed common affidavit in reply through Mr. Hrishikesh Kiran Utpat, Deputy Director in office of Directorate General of GST Intelligence, Mumbai Zonal Unit. Though 5/18 WPL2901_20.doc many things have been stated, for purpose of consideration of interim prayer we may mention that as per stand of answering respondents, based on information received that some exporters had availed input tax credit (ITC) on basis of ineligible documents or by committing fraud showing payment of IGST on goods exported out of India, joint pan India operation was conducted on 11.09.2019 by Directorate General of GST Intelligence and Directorate General of Revenue Intelligence. Various exporters covered in said operation included proprietorship firm of petitioner. said exporter is being investigated by Directorate General of GST Intelligence in regard to possible violations of GST law. 9.1. From investigation carried out till date, it prima facie appears that M/s. XS Components has indulged in availment and utilization of fake input tax credit (ITC) without actual receipt of goods or services and has fraudulently claimed refund of bogus ITC despite being ineligible. Details of investigation carried out till filing of affidavit in reply on 23.09.2020 have been stated. Against exports worth Rs.114.75 crores for period from August, 2017 to April, 2019, it appears that petitioner s firm had received foreign remittances amounting to Rs.21.56 crores only. On other hand, for said period GST refund amounting to Rs.9,32,96,551.00 has been credited to bank account of petitioner. Investigation revealed that 21 suppliers had passed on ITC greater than Rs.10 lakhs to M/s. XS Components. Out of these, 17 were stated to be New Delhi based and 1 Mumbai based. All New Delhi based suppliers have been found to be non-existent. Mumbai based firm M/s. Kumar Tradings which is also currently under investigation appears to have passed on ineligible ITC to M/s. XS Components on strength of fake invoices without actual supply of goods or services. No payments have been made to suppliers by petitioner. It was thereafter that summons under section 70 of Central Goods and Services Tax Act, 2017 was issued to petitioner. 6/18 WPL2901_20.doc 9.2. In his statement recorded on 28.02.2020, petitioner admitted that in certain cases he had received only invoices without actual receipt of goods or services, giving list of 8 firms from whom he received such invoices. After his appearance on 28.02.2020, petitioner did not appear before investigating authorities despite summons. Instead he left India for Dubai on 09.03.2020 without informing authorities. 9.3. According to respondents, investigations carried out prima facie indicates that there is network of fictitious entities set up only to pass on fake ITC; petitioner appears to have utilized such fake ITC to discharge his IGST liability on export of goods with intention to get ineligible refund and thus to defraud government exchequer. 9.4. From analysis of bank transactions in two bank accounts of petitioner in Karnataka Bank Limited and in Indusind Bank, it appeared that after receipt of IGST refund, he had transferred substantial amounts to various other accounts. Therefore, there was bona fide apprehension that petitioner would siphon-off remaining money lying in his bank accounts with view to thwarting ultimate collection of tax demand that is likely to be raised on completion of enquiry. 9.5. After referring to section 83 of Central Goods and Services Tax Act, 2017 (briefly CGST Act hereinafter), it is stated that provisional attachment of bank accounts of petitioner was proposed. Holding that investigation carried out against petitioner falls within ambit of pendency of any proceedings under section 67 and section 74 of CGST Act, it is stated that Principal Additional Director General concluded that it was necessary to provisionally attach bank accounts of petitioner. In this connection, reference has been made to rule 159 of Central Goods and Services Tax Rules, 2017 (briefly CGST Rules hereinafter), more particularly sub-rules (5) and (6) thereof as well as to Form GST DRC-22. It is therefore 7/18 WPL2901_20.doc contended that Principal Additional Director General was vested with power to provisionally attach bank accounts of petitioner under section 83 of CGST Act which power he has exercised. Power has also been conferred on Commissioner to consider objection filed by person concerned for lifting or withdrawing of such provisional attachment under sub-rules (5) and (6) of rule 159 of CGST Rules. Respondents have explained that action under section 83 of CGST Act is provisional measure to protect interest of revenue in course of investigation. It should not be equated with attachment in course of recovery proceeding post assessment. It is stated that department was constrained to provisionally attach bank accounts of petitioner to safeguard interest of government exchequer. Such attachment is provisional only. 9.6. Allegation of petitioner that no order of provisional attachment was passed by Commissioner has been denied as it is stated that order for provisional attachment in Form GST DRC-22 was issued which is requisite format under section 83 of CGST Act read with rule 159 of CGST Rules. 10. Petitioner has filed rejoinder affidavit denying allegations made against him by respondents. Regarding statement made by him on 28.02.2020, he has stated that it was not voluntary statement but one made under duress. He has stated that M/s. XS Components has exported goods worth Rs.114 crores and had realized about Rs.22 crores. Before entire dues could be realized and paid to suppliers, search was carried out and original documents were seized, further blocking importer exporter code of petitioner. Regarding freezing of bank accounts, he has stated that it came to his notice only when his son s school payment cheque got dishonoured. 11. In additional affidavit filed by respondent Nos.5 to 7 following order of this Court dated 08.10.2020, reference has been made 8/18 WPL2901_20.doc to office memorandum dated 12.05.2019 issued by Central Board of Indirect Taxes and Customs wherein it is provided that provision for provisional attachment of property including bank accounts contained in section 83 of CGST Act read with rule 159 of CGST Rules should be invariably invoked in cases of fake invoices detected during investigations. In said affidavit, relevant note-sheets have been annexed wherefrom it is seen that Principal Additional Director General had noted on 08.07.2020 that in light of apparent findings of fraudulent availment of IGST refund, it was deemed necessary to attach bank accounts of concerned person Mr. S. P. Mandavia to protect government revenue as per section 83 of CGST Act. It has been clarified that post of Principal Additional Director General is equivalent to post of Principal Commissioner and he granted approval to action under section 83. Thereafter order was issued on 08.07.2020 in prescribed format i.e., Form GST DRC-22. Reference has been made to sections 67 and 74 of CGST Act whereafter it is contended that investigation carried out in respect of petitioner falls within ambit of pendency of any proceedings under sections 67 and 74 which is essential pre-requisite for invocation of section 83 of CGST Act. 12. While Dr. Kantawala submits that attachment of bank accounts of petitioner and his family members is wholly unjustified and illegal being beyond purview of section 83 of CGST Act causing immense hardship to petitioner and his family members, Mr. Jetly, learned senior counsel for respondents on other hand submits that attachment of bank accounts is provisional only and said power is available to authorities which has been exercised in bonafide manner to protect interest of government revenue. He has referred to rule 159 of CGST Rules and submits that petitioner has got adequate and efficacious alternative remedy against such provisional attachment which he has not availed. 9/18 WPL2901_20.doc 13. Dr. Kantawala has produced before Court number of decisions in support of his contention that such harsh and drastic measure like attachment of bank account should ordinarily not be resorted to and if at all same is required to be done, due procedure has to be followed. Asserting that due procedure has not been followed, he submits that in present case there was no necessity to resort to attachment of bank accounts when petitioner had deposited Rs.30,00,000.00 with respondent No.4 in month of January, 2020. 14. Submissions made by learned counsel for parties have been considered. 15. Section 83 of CGST Act deals with provisional attachment to protect revenue in certain cases. Section 83 reads as under:- 83. Provisional attachment to protect revenue in certain cases : (1) Where during pendency of any proceedings under section 62 or section 63 or section 64 or section 67 or section 73 or section 74, Commissioner is of opinion that for purpose of protecting interest of Government revenue, it is necessary so to do, he may, by order in writing attach provisionally any property, including bank account, belonging to taxable person in such manner as may be prescribed. (2) Every such provisional attachment shall cease to have effect after expiry of period of one year from date of order made under sub-section (1). 16. We had done some analysis of this provision in our order dated 08.10.2020. To enable invocation of section 83, first and foremost there must be pendency of any proceeding either under section 62 or under section 63 or under section 64 or under section 67 or under section 73 or under section 74 of CGST Act. Thereafter, Commissioner must form opinion that for purpose of protecting interest of government revenue, it is necessary to attach any property provisionally, including bank account belonging to taxable person. On satisfaction of above two conditions, Commissioner must pass order in 10/18 WPL2901_20.doc writing provisionally attaching any property of taxable person including bank accounts. Because of very nature of temporary attachment, sub-section (2) makes it abundantly clear that such provisional attachment shall not be in excess of one year from date of order made under sub-section (1) and shall cease to have effect after expiry of one year from date of order. 17. Rule 159 of CGST Rules deals with provisional attachment of property as envisaged in section 83 of CGST Act. Rule 159 is extracted hereunder:- 159. Provisional attachment of property.- (1) Where Commissioner decides to attach any property, including bank account in accordance with provisions of section 83, he shall pass order in FORM GST DRC-22 to that effect mentioning therein, details of property which is attached. (2) Commissioner shall send copy of order of attachment to concerned Revenue Authority or Transport Authority or any such Authority to place encumbrance on said movable or immovable property, which shall be removed only on written instructions from Commissioner to that effect. (3) Where property attached is of perishable or hazardous nature, and if taxable person pays amount equivalent to market price of such property or amount that is or may become payable by taxable person, whichever is lower, then such property shall be released forthwith, by order in FORM GST DRC-23, on proof of payment. (4) Where taxable person fails to pay amount referred to in sub-rule (3) in respect of said property of perishable or hazardous nature, Commissioner may dispose of such property and amount realized thereby shall be adjusted against tax, interest, penalty, fee or any other amount payable by taxable person. (5) Any person whose property is attached may, within seven days of attachment under sub-rule (1), file objection to effect that property attached was or is not liable to attachment, and Commissioner may, after affording opportunity of being heard to person filing objection, release said property by order in FORM GST DRC- 23. (6) Commissioner may, upon being satisfied that property was, or is no longer liable for attachment, release 11/18 WPL2901_20.doc such property by issuing order in FORM GST DRC- 23. 17.1. As per sub-rule (1), when Commissioner decides to attach any property including bank account in terms of section 83, he shall pass order in Form GST DRC-22 mentioning therein details of property which is attached. Sub-rule (5) says that any person whose property is attached may, within 7 days of attachment, file objection to such provisional attachment and if such objection is filed, Commissioner may release said property after affording opportunity of being heard to person filing objection. As per sub-rule (6), Commissioner may, upon satisfaction that property was or is no longer liable for attachment, release such property. 17.2. In so far sub-rule (6) is concerned, same is in consonance with provisional nature of attachment. Under section 83 and rule 159 we are dealing with provisional attachment of property, including bank account. Therefore, by its very nature such attachment is temporary as opposed to permanent. Dictionary meaning of provisional is arranged or existing for present, possibly to be changed later ; Black s Law Dictionary, 8th Edition has defined it as temporary or conditional . Being provisional such attachment is required to be reviewed periodically by Commissioner. Such suo-motu review is implicit in rule 6 which empowers Commissioner to release property provisionally attached before outer limit of one year if he is satisfied that such attachment of property is no longer required. 17.3 In so far sub-rule (5) is concerned, it goes without saying that pre- assessment attachment of property, including bank account, even if provisional, is drastic measure. Its sole purpose is to protect interest of government revenue. It cannot be used as punitive measure. It is serious invasion into private domain of tax payer. Therefore, to ensure that said power is exercised after due consideration and in reasonable manner as well as to provide opportunity to tax payer 12/18 WPL2901_20.doc to satisfy Commissioner that such attachment is unnecessary and therefore should be lifted, provision for objection, hearing and release is provided in sub-rule (5). 18. format of passing order contemplated under section 83 read with sub-rule (1) of rule 159 is provided in Form GST DRC-22 which is in form of intimation to bank / post office / financial institution / immovable property registering authority. 19. From careful analysis of above provisions what is to be noted is that property including bank account liable to or which has been provisionally attached must belong to taxable person. Taxable person has been defined in section 2(107) of CGST Act to mean person who is registered or is liable to be registered under sections 22 or 24 of CGST Act. 20. Respondent Nos.5 to 7 have explained in their affidavits that investigation carried out against petitioner falls within ambit of sections 67 and 74 of CGST Act and on satisfaction of concerned authority provisional attachment orders were issued in prescribed format. 21. Contention of petitioner that there was violation of provisions of section 83 of CGST Act and no due process was followed while provisionally attaching bank accounts and rebuttal contentions of respondents that there has been due compliance to statutory requirement of section 83 read with rule 159 may require detailed examination. However, for moment we may consider attachment of bank accounts from perspective of taxable person i.e., petitioner Mr. Siddarth Mandavia and his proprietorship firm M/s. XS Components. From list of bank accounts mentioned in paragraph 8.8, it is seen that bank accounts at Sr. Nos.3, 5 and 12 are in joint names of Ms. Mansi Mandavia and Mr. 13/18 WPL2901_20.doc Siddharth P. Mandavia whereas bank account at Sr. No.10 is solely in name of Ms. Mansi Siddharth Mandavia. It has been clarified that Mansi Mandavia and Mansi Siddharth Mandavia is one and same person and is wife of petitioner. On other hand we find that bank accounts at Sr. Nos.6 and 11 are in joint names of petitioner and Hriaan Siddharth Mandavia (minor) who is stated to be son of petitioner. Prima facie, Mansi Mandavia alias Mansi Siddharth Mandavia and Hriaan Siddharth Mandavia (minor) are not concerned tax payers in this case. There are no allegations against them. To be more specific, there is no allegation or any averment made by respondents that any money belonging to petitioner or to his firm have been credited into joint accounts of petitioner with his wife or with his minor son or into account of his wife. As matter of fact, in paragraph 38 of their first affidavit, respondent Nos.5 to 7 have stated that reason for attachment of other bank accounts appears to be their link with petitioner or his PAN. They being not tax payers in this case, provisional attachment of their bank accounts therefore would not be justified. 21.1. In so far other bank accounts are concerned, considering seriousness of measure and having regard to provisions contained in sub-rule (5) of rule 159, we are of view that liberty may be granted to petitioner even at this stage to file objection to provisional attachment and if such objection is filed, competent authority may take appropriate decision thereon after providing opportunity of hearing to petitioner. 22. At this stage, we may usefully refer to observations of Gujarat High Court in case of Patran Steel Rolling Mill Vs. Assistant Commissioner of State Tax, 2019 (20) GSTL 732 wherein it was emphasized that while exercising powers under section 83 of CGST Act, authorities should try to balance interest of government revenue on one hand and interest of dealer on other hand. 14/18 WPL2901_20.doc Authorities should ensure that dealer is left in position where he can continue with his business because it is only if dealer continues with business that he would be in position to generate revenue and pay taxes. Bringing business of dealer to halt does not in any manner serve interest of revenue. 23. In so far blockage of importer exporter code of petitioner is concerned, we find that relevant statute in this connection is Foreign Trade (Development and Regulation) Act, 1992 . Section 7 thereof makes it abundantly clear that importer exporter code number is granted by Director General of Foreign Trade who is appointed by central government or by officer authorized by Director General of Foreign Trade. No person can make any import or export without importer exporter code number so granted. 23.1. Suspension and cancellation of importer exporter code number is provided in section 8 of Foreign Trade (Development and Regulation) Act, 1992. For ready reference, section 8 is extracted hereunder:- 8. Suspension and cancellation of Importer-exporter Code Number- (1) Where--- (a) any person has contravened any of provisions of this Act or any rules or orders made thereunder or foreign trade policy or any other law for time being in force relating to Central excise or customs or foreign exchange or has committed any other economic offence under any other law for time being in force as may be specified by Central Government by notification in Official Gazette; or (b) Director-General or any other officer authorised by him has reason to believe that any person has made export or import in manner prejudicial to trade relations of India with any foreign country or to interests of other persons engaged in imports or exports or has brought disrepute to credit or goods of, or services or technology provided from, country; or (c) any person who imports or exports specified goods or 15/18 WPL2901_20.doc services or technology, in contravention of any provision of this Act or any rules or orders made thereunder or foreign trade policy, Director-General or any other officer authorised by him may call for record or any other information from that person and may, after giving to that person notice in writing informing him of grounds on which it is proposed to suspend or cancel Importer-exporter Code Number and after giving him reasonable opportunity of making representation in writing within such reasonable time as may be specified in notice and, if that person so desires, of being heard, suspend for period, as may be specified in order, or cancel Importer-exporter Code Number granted to that person. (2) Where any Importer-exporter Code Number granted to person has been suspended or cancelled under sub-section (1), that person shall not be entitled to (import or export any goods or services or technology) except under special licence, granted, in such manner and subject to such conditions as may be prescribed, by Director-General to that person. 23.2. From careful reading of sub-section (1) of section 8 it is seen that when there is contravention of provisions of Foreign Trade (Development and Regulation) Act, 1992 or rules or orders made thereunder, or breach of foreign trade policy or if Director General of Foreign Trade or his authorized officer has reason to believe that any person has made export or import in manner which is prejudicial to trade relations of India with any foreign country etc., Director General or authorized officer after calling for record and after giving notice in writing to person concerned informing him of grounds on which his importer exporter code number is sought to be suspended or cancelled and after giving him reasonable opportunity of making representation in writing and personal hearing, if sought for, either suspend or cancel importer exporter code number granted to that person. If it is case of suspension then period has to be specified in order of suspension. Once importer- exporter code number is suspended or cancelled, that person would not be entitled to carry out any import or export except under special licence that may be granted by Director General. 16/18 WPL2901_20.doc 24. It is trite that when law requires thing to be done in particular manner, it has to be done in that particular manner and recourse to any other manner is necessarily forbidden. Suspension and cancellation of importer exporter code number can be done only under Foreign Trade (Development and Regulation) Act, 1992 by Director General of Foreign Trade or by his authorized officer for reasons specified and in manner provided in section 8 of said Act. Respondents arrayed in this petition are neither Director General of Foreign Trade nor his authorized officer. Prima facie, they are not empowered either to suspend or cancel importer exporter code of petitioner, only two measures provided under law. There is no provision for blocking of importer exporter code, that too by authority which is not competent either to suspend or cancel such code. It is interesting to note that on allegation of blocking of importer exporter code of petitioner by respondent No.3 made in paragraph 11 and ground No.S of writ petition, respondents in paragraph 32 of their first affidavit have offered no comment, so also in paragraph 64. If that be position, blocking of importer exporter code of petitioner by any authority other than Director General of Foreign Trade or by his authorized officer under section 8 of Foreign Trade (Development and Regulation) Act, 1992 would be unauthorized, unwarranted and without jurisdiction. 25. That being position, we feel that following directions may meet ends of justice. Accordingly, as interim measure, we pass following orders:- 1. account number at Sr.No.10 of paragraph 8.8 which is solely in name of Ms. Mansi Siddharth Mandavia shall be unfrozen forthwith; 2. account numbers which are jointly in names of petitioner and either Mansi Mandavia alias Mansi Siddharth Mandavia and Hriaan Siddharth Mandavia at Sr. Nos.3, 5, 6, 17/18 WPL2901_20.doc 11 and 12 of paragraph 8.8 shall be unfrozen forthwith subject to condition that until otherwise directed, those accounts shall be in debit freeze to extent of 50% of amounts presently credited; 3. In so far other accounts are concerned, petitioner may file objection before Principal Additional Director General of GST Intelligence within period of 7 days from today; 4. If such objection is filed as above, Principal Additional Director General shall afford opportunity of hearing to petitioner and thereafter pass appropriate order in accordance with law within period of 3 weeks from date of filing of objection; 5. Blockage of importer exporter code of petitioner by respondent No.3 or by any other authority shall be withdrawn forthwith. 6. List for further consideration on 15.12.2020. 26. This order will be digitally signed by Private Secretary of this Court. All concerned will act on production by fax or email of digitally signed copy of this order. (ABHAY AHUJA, J.) (UJJAL BHUYAN, J.) Minal Parab 18/18 Siddharth Mandavia v. Union of India and other
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