2024 (9) TMI 1224 - HC - GST

Provisional attachment of bank account under Section 83 of the CGST Act, 2017 and Rule 159 of the CGST Rules, 2017 - objection to the provisional attachment is kept pending indefinitely - HELD THAT - There is an inbuilt scheme of consideration of objection against provisional attachment of the property. The provision, in terms, does not provide any time limit within which such objection should be decided. However, the objection to the provisional attachment is required to be decided within a reasonable time and it cannot be kept pending indefinitely. Two months have already passed from the date of objection filed by the petitioner. The objections are required to be decided within a reasonable time and if the objections are kept pending for a long time without decision, it would frustrate the very object of consideration of objection as engrafted under Rule 159 (5) of the CGST Rules, 2017. The objections must be decided within a reasonable time limit. In the absence of any express provision, the objections, in such cases, are required to be decided within an outer limit of three months from the date of submission of the objections. Respondent No. 2 is, therefore, directed to decide the objection filed by the petitioner by affording him an opportunity of being heard within a period of one month from today - Petition disposed off.

Summary

Issues:
Provisional attachment of bank account under Section 83 of the CGST Act, 2017 and Rule 159 of the CGST Rules, 2017. Delay in deciding objections to provisional attachment.

Analysis:
The petitioner filed a petition against the provisional attachment of their bank account by the respondents under Section 83 of the Central Goods and Services Tax Act, 2017, and Rule 159 of the Central Goods and Services Tax Rules, 2017. The petitioner claimed that they were not directly communicated the order but learned about it through the bank. Subsequently, the petitioner submitted an objection under Section 159 (5) of the CGST Rules, 2017, on 05.07.2024, which remained pending without a decision. The petitioner argued that objections to provisional attachment must be decided within a reasonable time and cannot be left pending indefinitely.

The respondent's counsel assured that the objection submitted by the petitioner would be decided promptly. The court noted that the petitioner had followed the procedure by submitting an objection in FORM GST DRC-22A, as per Rule 159 (5) of the CGST Rules, 2017. The rule allows the person whose property is attached to file an objection stating that the property is not liable for attachment. The Commissioner is then required to decide on the objection after providing an opportunity for a hearing.

The court emphasized that while there is no specific time limit mentioned in the rule for deciding objections, they must be resolved within a reasonable time to fulfill the purpose of considering objections. In this case, two months had passed since the objection was filed, and the court set an outer limit of three months for deciding such objections. Respondent No. 2 was directed to decide on the petitioner's objection within one month.

Furthermore, the court recommended that the respondents issue a circular specifying the time limit for deciding objections to avoid rendering the provisions of Rule 159 (5) of the CGST Rules, 2017 meaningless. It was highlighted that the maximum period for provisional attachment under Section 83 of the CGST Act, 2017, is one year. The writ petition was disposed of with these directions, emphasizing the importance of timely resolution of objections to provisional attachment.