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2022 (12) TMI 1369 - HC - GSTProvisional attachment of bank account of the petitioner - Section 83 of the Central Goods and Services Tax Act, 2017 - HELD THAT - By its very nature, provisional attachment cannot be for an indefinite period. Dictionary meaning of provisional is arranged or existing for the present, possible to be changed later ; Black s Law Dictionary, eighth edition, has defined it as temporary or conditional . The two words provisional and attachment read in conjunction can only mean a temporary attachment . To ensure that the valuable right of a taxable person is not infringed for an indefinite period, legislature itself has provided for a definite time line in sub-section (2) of Section 83 of the CGST Act mandating that a provisional attachment order would have a life span of only one year from the date of the order made under sub-section (1). After expiry of a period of one year, such provisional attachment would cease to have effect - it is evident that both the provisional attachment orders dated 02.12.2019 and 08.12.2021 have spent their force. Such provisional attachment orders cannot therefore be allowed to continue beyond the period prescribed under the statute. The provisional attachment orders dated 02.12.2019 and 08.12.2021 passed by respondent No.2 are hereby set aside and quashed - petition allowed.
Issues:
Challenge to provisional attachment of bank account under Section 83 of the Central Goods and Services Tax Act, 2017. Analysis: 1. The petitioner challenged the provisional attachment of their bank account on two separate occasions, on 02.12.2019 and 08.12.2021, under Section 83 of the CGST Act. The petitioner argued that due to the lapse of time, both provisional attachment orders were no longer valid. The respondents contended that ongoing investigations under Section 67 of the CGST Act justified the provisional attachment to prevent the petitioner from withdrawing funds that could prejudice the respondents' interests. 2. The petitioner's counsel highlighted that provisional attachment cannot be continued beyond one year, as per Section 83(2) of the CGST Act. The petitioner presented judgments from various High Courts supporting this statutory provision. The court noted that the provisional attachment orders were issued by the Additional Director General and the Principal Additional Director General, attaching the petitioner's bank accounts with ICICI Bank and Corporation Bank, respectively. 3. Section 83 of the CGST Act allows for provisional attachment to protect revenue during certain proceedings. Sub-section (1) empowers the Commissioner to provisionally attach any property, including bank accounts, belonging to the taxable person for the purpose of safeguarding government revenue. Sub-section (2) specifies that such provisional attachments cease to be valid after one year from the date of the order. 4. The court emphasized that the power to attach a bank account is a serious measure impacting property rights and privacy. It must be exercised by a high authority like the Commissioner, with pending proceedings against the taxable person and a necessity to protect government revenue. The legislature mandated a one-year limit for provisional attachments to prevent indefinite infringements on the rights of taxable persons. 5. Considering the legislative intent, the court concluded that the provisional attachment orders from 02.12.2019 and 08.12.2021 had exceeded their validity period and were therefore set aside and quashed. The court clarified that this decision did not express any opinion on the ongoing proceedings against the petitioner under Sections 67(2) and 74 of the CGST Act. Respondent No.2 was directed to inform all bankers of the petitioner about the quashing of the provisional attachment orders. 6. The writ petition was allowed without costs, and any related miscellaneous petitions were closed as a consequence of the judgment.
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