2023 (6) TMI 1187 - HC - GST

Provisional attachment of Bank Accounts of petitioner - attachment in operation for more than one year - HELD THAT - When a provisional attachment remains in operation for a period exceeding one year from the date it is made, it shall cease to have effect under sub-section (2) of Section 83 of the CGST Act. Considering the clear legal mandate as ordained by subsection (2) of Section 83, there is much substance in the contentions that by operation of the said provision, the provisional attachment of the petitioner s bank accounts as made by the Commissioner vide order dated 7 March, 2022 has ceased to operate after 7th March 2023. Such attachment cannot continue after 7 March, 2023 - It needs to be observed that in pursuance of the order dated 4th May 2022 passed by this Court the Petitioners had undertaken to provide bank guarantee of a nationalised bank, however, as the provisional attachment itself has ceased to operate, the bank guarantee as furnished by the Petitioners be returned to the Petitioner. The Writ Petition is disposed of.

Summary

Issues involved: Challenge to order provisionally attaching bank accounts under Section 83 of the Central Goods and Service Tax Act, 2017.

Summary:
The High Court of Bombay heard a petition challenging an order dated 7th March 2022, which provisionally attached the petitioners' bank accounts under Section 83 of the CGST Act. The petition argued that as per Section 83(2) of the Act, such provisional attachments cease to have effect after one year from the date of the order. The court noted that Section 83 empowers the Commissioner to attach properties, including bank accounts, to protect the government revenue. The provision specifies that any provisional attachment shall cease to have effect after one year. Therefore, if a provisional attachment exceeds one year, it cannot continue. The court agreed with the petitioner's contention that the provisional attachment of their bank accounts ceased to operate after one year from the order date.

In compliance with a previous court order, the petitioners had provided a bank guarantee, but since the provisional attachment had ceased to operate, the court ordered the return of the bank guarantee to the petitioners. The court clarified that its order was specific to the provisional attachment of the bank account and that any future proceedings initiated against the petitioners should be adjudicated in accordance with the law. All contentions regarding such future proceedings were expressly kept open. The court disposed of the writ petition based on the above observations, without imposing any costs.