2024 (4) TMI 999 - HC - GST

Validity of an order u/s 83 - Seizure of the outward movement of funds from the bank account - Bank not permitting the operation - HELD THAT - In view of Section 83 (2) of the Act, the life of an order of provisional attachment is only one year. In the instant case, the impugned communication is dated 14.08.2019 and a period of one year has elapsed from the issuance of the said communication. Consequently, the impugned order dated 14.08.2019 has ceased to be effective and cannot be any more implemented either by the respondents No. 1 and 2 or the HDFC Bank i.e., respondent No. 3. Accordingly, it is declared that order dated 14.08.2019 ceases to have effect. Consequently, respondent No. 3, HDFC Bank henceforth cannot restrain operation of the bank account of the petitioner based solely on the basis of order dated 14.08.2019. Petition is accordingly disposed of in the above terms. It is, however, clarified that this order would be without prejudice to any other order of provisional attachment issued by either respondents No. 1 and 2 or any other authority communicated to the HDFC Bank. In case any such order is communicated to the HDFC Bank, the Bank shall give due credence to the same irrespective of this order. Learned counsel for petitioner submits that petitioner has till date not been communicated any other order of attachment issued either by respondents No. 1 and 2 or any other authority and reserves the right of the petitioner to take appropriate proceedings against any order, if so communicated. Dasti under signature of the Court Master.

Summary

Issues involved:
The validity of an order u/s 83 of the Central Goods and Service Tax Act, 2017 to seize the outward movement of funds from a bank account after the passage of one year.

Judgment Details:

Issue 1: Validity of order u/s 83 of the Act

The petitioner challenged a communication dated 14.08.2019 issued u/s 83 of the Act to seize funds from a bank account. The petitioner argued that as per Section 83(2), the validity of such an order is one year, and since this period had elapsed, the bank should allow operation of the account. The Court noted that Section 83 empowers the Commissioner to provisionally attach property, including bank accounts, to protect government revenue. However, as per Section 83(2), such attachment ceases after one year. Therefore, the impugned order dated 14.08.2019 had expired and could no longer be enforced. The Court declared that the bank cannot restrict the account based on this order anymore.

The petition was disposed of with the clarification that this decision does not affect any other provisional attachment orders issued by authorities to the bank. If any such order is received by the bank, it must comply regardless of this judgment. The petitioner confirmed not receiving any other attachment orders and reserved the right to challenge any future orders if communicated.

This summary provides a detailed overview of the judgment regarding the validity of an order issued u/s 83 of the Act and its implications on the bank account in question.