2020 (8) TMI 329 - HC - GST

Provisional attachment of Bank Accounts - Section 83 of the CGST Act - whether Annexure-A, communication /order dated 28.05.2019 in respect of provisional attachment of Bank Account of the petitioners under Section 83 of the CGST Act, is existing in the eye of law as on this day or not? - HELD THAT - By virtue of the Sub Section 2 of Section 83 of the aforesaid Act, 2017, the impugned provisional attachment of Bank account of the petitioners dated 28.05.2019 passed by respondent No.1 under Section 83 of the CGST Act, 2017 is in vogue till 27.05.2020. Whereas, the petitioners have presented the present petition on 22.06.2020. As on 22.06.2020, the provisional attachment of bank account of the petitioners, the communication/order dated 28.05.2019 ceases to operate with the effect from 27.05.2020. Respondent Nos.1 and 2 are hereby directed to defreeze the petitioners bank account within a period of two weeks from the date of receipt of this order - Petition disposed off.

Summary

Issues:
Challenge to provisional attachment of bank accounts under Section 83 of CGST Act.

Analysis:
The petitioners sought relief to set aside the provisional attachment of their bank accounts and requested the court to direct the respondents to defreeze the accounts. They argued that the attachment order dated 28.05.2019 had lapsed as per Section 83(2) of the CGST Act by 27.05.2020. The petition was presented on 22.06.2020, after the expiry of the one-year period mentioned in Section 83(2). The petitioners contended that the attachment order was no longer valid in law. On the other hand, the respondents argued against interference, stating that the provisional attachment was made under Section 83 of the GST Act.

The crux of the matter was whether the communication/order dated 28.05.2019 for the provisional attachment of the bank accounts was still valid as of the date of the petition. Section 83 of the GST Act allows for provisional attachment of property, including bank accounts, for the purpose of protecting government revenue during certain proceedings. As per Section 83(2), such provisional attachments cease to have effect after one year from the date of the order. In this case, since the petition was filed after the expiry of the one-year period, the provisional attachment was no longer valid.

The court, after hearing both parties and examining the legal provisions, held that the provisional attachment of the petitioners' bank accounts had ceased to operate as of 27.05.2020. Consequently, the court directed the respondents to defreeze the bank accounts within two weeks from the date of the order. The main petition was disposed of accordingly, and the interim application was also disposed of in light of the main petition's disposal.