2022 (3) TMI 308 - HC - GST

Provisional attachment of petitioner's Bank Accounts - Section 83 of the Central Goods and Services Tax Act - HELD THAT - Section 83 of the CGST Act pertains to provisional attachment to protect the revenue in certain cases. In sub-section (1) of Section 83 the commissioner is empowered to order provisional attachment of the property of the assessee including bank account where proceedings under Chapters XII, XIV and XV are pending and the commissioner is of the opinion that for the purpose of protecting the interest of government revenue it is necessary so to do. Sub-section (2) of Section 83 provides that every such provisional attachment shall cease to have effect after expiry of period of one year from the date of order made under sub-section (1). Also, CBIC's circular dated 23.02.2021 has also clarified that every provisional attachment shall cease to have effect after expiry of period of one year from the date of attachment order - In the present case the order of attachment was passed more than a year back and would therefore be ceased to be effective upon completion of period of one year. The provisional attachment order stands stayed - Leave to join the concerned adjudicating officer at Udaipur as additional respondent is granted, as prayed for.

Summary

Issues:
1. Provisional attachment of bank account under Section 83 of the CGST Act.
2. Duration of provisional attachment as per sub-section (2) of Section 83.
3. Interpretation of the Supreme Court judgment in Civil Appeal No.1155/2021.
4. Impact of CBIC circular dated 23.02.2021 on the duration of provisional attachment.
5. Stay of the provisional attachment order.
6. Granting leave to join the concerned adjudicating officer as an additional respondent.
7. Scheduling further consideration of the petitioner's prayers.

Analysis:
The High Court addressed the issue of provisional attachment of the petitioner's bank account under Section 83 of the CGST Act. It was noted that the provisional attachment was ordered by the respondents to protect the government revenue in pending proceedings. However, the counsel for the petitioner highlighted that as per sub-section (2) of Section 83, such provisional attachment cannot remain in effect beyond one year from the date of the order made under sub-section (1).

The Court referred to the provisions of Section 83 of the CGST Act, emphasizing the power of the commissioner to order provisional attachment in certain cases to safeguard government revenue. Citing a recent Supreme Court judgment in Civil Appeal No.1155/2021, the Court discussed the powers of provisional attachment and the inherent limitations as safeguards. It was established that the provisional attachment ceases to have effect after the expiry of one year from the date of the order made under sub-section (1).

Furthermore, the Court considered the impact of a circular issued by the CBIC on the duration of provisional attachment. The circular dated 23.02.2021 clarified that every provisional attachment shall cease to have effect after the completion of one year from the date of the attachment order. In the present case, since the order of attachment was issued more than a year ago, it was deemed ineffective upon the completion of the one-year period.

As a result, the Court provided interim relief by staying the provisional attachment order. Additionally, the Court granted leave to join the concerned adjudicating officer as an additional respondent and directed the amendment of the cause title within a week. A notice was to be issued to the newly added respondent returnable on 22.03.2022 for further proceedings regarding the petitioner's prayers. The matter was scheduled for consideration on the same date to address the remaining prayers of the petitioner comprehensively.