2022 (9) TMI 889 - HC - GST

Lifting of provisional attachment - constitutional validity of Rule 159 and sub rules (1) (5) and (6) of CGST - section 83 of CGST Act - HELD THAT - As is evident, more than two (2) years have passed since the provisional attachment was ordered of the subject bank account. Provisional attachment was ordered in the case on 14.08.2020. It is pertinent to note that there is no discussion whatsoever in the order dated 28.09.2020 with regard to the maximum time-frame set out for investigation under section 83 of the Act and the resultant consequences of that period having been crossed - The order dated 28.09.2020, insofar as it seeks to continue the provisional attachment order is set aside. Petition disposed off.

Summary

Issues:
1. Challenge to the legality of Rule 159 and specific sub-rules.
2. Whether the provisional attachment should be lifted.
3. Legal efficacy of the order dated 28.09.2020.

Analysis:
1. The petitioner sought to declare Rule 159 and specific sub-rules ultra vires to the constitution. However, the petitioner decided not to press this relief. The primary issue was whether the provisional attachment should be lifted and the legal effectiveness of the order dated 28.09.2020.

2. The court noted that more than a year had passed since the provisional attachment was imposed, exceeding the period allowed for investigation under Section 83 of the Act. The provisional attachment was ordered on 14.08.2020, and more than two years had passed since then. The court considered the grievances raised by the petitioner regarding the attachment order in previous proceedings.

3. The court acknowledged that investigations were nearing completion, and a show-cause notice might be issued. As the one-year period specified in Section 83 had lapsed, the court directed the respondents to lift the provisional attachment within two days. The order dated 28.09.2020, which sought to continue the attachment, was set aside due to the expiry of the investigation timeframe.

4. The court clarified that the decision to lift the attachment did not affect the ongoing investigation or any future proceedings. It emphasized that all actions must comply with the provisions of the law. The writ petition was disposed of with parties instructed to act based on the digitally signed copy of the order.