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2020 (10) TMI 1000 - HC - GSTContinuation of provisional attachment - Attachment of petitioner s company s current bank account - time limitation - expiry of the mandatory period of one year prescribed under Sub-Section(2) of Section 83 of the CGST Act, 2017 - HELD THAT - The issue in the Writ Petition relates to a provisional attachment order dt.07.06.2019 issued by the 2nd respondent and its continuing existence after 06.06.2020, i.e., after the expiry of one year from 07.06.2019, contrary to sub-Section(2) of Section 83 of the Act. The fact that the said attachment cannot continue in view of the sunset clause in sub-Section(2) of Section 83 of the Act beyond a period of one year from 07.06.2019, is not in dispute. The impugned provisional attachment order dt.07.06.2019 issued by the 2nd respondent cannot continue after 06.06.2020 in view of sub-Section(2) of Section 83 of CGST Act, 2017, and any such continuation would be violative of Articles 14, 19(1)(g) and 300A of the Constitution of India and would be wholly without jurisdiction - the Writ Petition is allowed directing the 5th respondent to allow the petitioner to operate its current account forthwith.
Issues:
Provisional attachment of bank account exceeding prescribed period under CGST Act, 2017. Analysis: The petitioners challenged the continuation of a provisional attachment order issued by the 2nd respondent on 07.06.2019, which attached the petitioner's company's bank account, even after the expiry of the one-year period mandated under Section 83(2) of the CGST Act, 2017. The petitioners contended that such continuation was illegal, arbitrary, and violated various articles of the Indian Constitution. They relied on judgments from the Karnataka High Court and the Gujarat High Court, which held that a bank account's provisional attachment cannot extend beyond the one-year period specified under the Act. The Senior Counsel for Central Taxes acknowledged this legal position but argued that since the matter was at the show-cause notice stage and money was present in the bank account, the respondents should be allowed to issue a fresh provisional attachment order. The High Court observed that the main issue in the Writ Petition revolved around the provisional attachment order dated 07.06.2019 and its continuation beyond 06.06.2020, which contravened Section 83(2) of the CGST Act, 2017. It was undisputed that the attachment could not persist beyond one year from the original order date. Consequently, the court held that the continuation of the provisional attachment order beyond the prescribed period was in violation of constitutional provisions and lacked jurisdiction. Therefore, the impugned order was deemed unsustainable after 06.06.2020, and the court directed the respondent bank to allow the petitioner to operate the bank account immediately. The Writ Petition was allowed with no costs, and any related pending petitions were to be closed accordingly.
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