2021 (2) TMI 695 - HC - GST

Attachment of bank account - One year passed - Seeking direction to respondent to permit operation of bank accounts of petitioners as attachment order cease to operate in terms of Section 83(2) of the Punjab Goods and Services Tax Act, 2017 (PGST Act) - seeking direction to respondent(s) to defreeze the bank accounts of the petitioners - HELD THAT - Similar, question has been answered in the case of M/S. A.P. STEELS AND SRI. SANJAY KUMAR MISHRA, VERSUS ADDITIONAL DIRECTOR GENERAL DGCI, BANGALORE ZONAL UNIT, BENGALURU 2020 (8) TMI 329 - KARNATAKA HIGH COURT where it was held that Respondent Nos.1 and 2 are hereby directed to defreeze the petitioners bank account within a period of two weeks from the date of receipt of this order. The respondents Banks are directed to allow the petitioners to operate their bank accounts forthwith - petition allowed.

Summary

Issues:
1. Provisional attachment of bank accounts under Section 83 of the PGST Act.
2. Validity of continuing attachment beyond the statutory period.
3. Interpretation of Section 83(2) of the PGST Act.
4. Constitutional validity under Articles 14, 19(1)(g), 21, 265, and 300-A.

Analysis:
1. The judgment involved two petitions seeking a mandamus to direct the Deputy Excise & Taxation Commissioner to permit the operation of bank accounts and defreeze them as they were provisionally attached under Section 83 of the PGST Act. The petitions contended that the continuation of the attachment was illegal and arbitrary.

2. The petitioner firm, engaged in the sale of ferrous metal, had its bank accounts provisionally attached after a search and inspection by State GST authorities. The petitioner sought relief as the attachment continued beyond the statutory period of one year. The petitioner sent legal notices and sought permission to operate the accounts, citing previous judgments on the limitation of provisional attachments.

3. The court referred to the case of A.P. Steels, which clarified the provision of Section 83(2) of the CGST Act. The court held that provisional attachment ceases to have effect after one year from the date of the order. In this case, the attachment order dated 13.06.2019 ceased to operate after 27.05.2020. Consequently, the court directed the respondents to defreeze the bank accounts within a specified period.

4. The judgment upheld the petitioner's contentions, emphasizing the legal position established in A.P. Steels' case. The court allowed both writ petitions, ordering the banks to permit the petitioners to operate their bank accounts immediately. The decision was based on the interpretation of Section 83(2) of the PGST Act and the constitutional validity under Articles 14, 19(1)(g), 21, 265, and 300-A.