Bank Account Attachment Unsustainable Once GST Appeal Filed, Rules Delhi High Court

The present writ petition (W.P.(C) 5712/2025 & CM APPL. 26041/2025) is being filed by a company named Benito Operations and Technologies Pvt. Ltd., against the Deputy Excise and Taxation Commissioner St Gurgaon North (respondent) in the Delhi High Court, before the benches comprising of Justice Prathiba M. Singh and Justice Shail Jain. The petitioner challenged two orders dated 6th March 2025 and 18th April 2025. Both orders froze the company’s bank accounts at Standard Chartered Bank (Gurgaon) and HDFC Bank (Manesar, Gurgaon).

Background of Case:

The case originates from an ongoing GST investigation against another company, called M/s Wings Operations and Technology India Pvt. Ltd. This company was run by Ms. Kiran Gupta and Mr. Aashish Deep Bansal, who are also connected to Benito Operations. The GST department in Haryana alleged that Wings Operations unfairly claimed Input Tax Credit (ITC) worth Rs. 1.33 crore without actually receiving any services, which is a violation of Section 16 of the CGST Act.

Claiming refunds based on that fake ITC. Suppressing facts to evade tax, which triggered action under Section 74. The final order by the GST department was passed on 2nd April 2025, confirming the demand of Rs. 1.33 crore, along with interest and penalty.

Claims of GST Department in Court:

The department believed that Benito Operations was simply a “new face” or rebranded version of Wings Operations, formed just to avoid tax liability after Wings came under investigation. For this, the department gave reasons that Benito was incorporated after the investigation started against Wings. Both companies have the same directors and shareholders (Kiran Gupta & Aashish Bansal). They share common suppliers and customers. Benito only responded after its bank account was frozen; it ignored previous summons and notices. Based on this, the department suspected an attempt to dodge taxes by creating a new company and hence froze Benito’s bank accounts under Section 83 of the CGST Act.

What Did Benito Argue in Court?

On these claims of the GST department, Benito’s argued in the Delhi High Court that the original company (Wings) had already filed an appeal against the Rs. 1.33 crore demand on 15th April 2025, before the Gurgaon Appellate Authority under Section 107 of the CGST Act. They had also made the mandatory pre-deposit, which is required while filing a GST appeal. Under Section 107(7), once an appeal is filed with the required deposit, the original demand order gets automatically stayed (put on hold). Therefore, since the appeal was already filed and pending, no freezing of Benito’s bank accounts should have been done. Benito also pointed out that the Delhi High Court has territorial jurisdiction, as they are a Delhi-registered company (even though the bank accounts are in Gurgaon).

Final Decision by Court:

On observing both sides, the High Court announced its final decision on 18th August 2025. On the date of the hearing, the GST department did not oppose lifting the bank account attachment. Their lawyer confirmed they were not pressing for attachment anymore since the appeal was already filed. Therefore, the Delhi High Court quashed the two orders dated 6th March 2025 and 18th April 2025 and allowed the company to freely operate its bank accounts [Standard Chartered Bank (DLF Building 7A, Gurgaon) and HDFC Bank (Manesar, Gurgaon)]. Directed that the banks must immediately act on this court order once a copy is given; they do not need to wait for any further communication from the GST department.