2022 (2) TMI 127 - HC - GST

Provisional attachment of bank accounts - Section 83(2) of the CGST Act, 2017 - HELD THAT - This Court disposes of the present writ petition by observing that the impugned provisional attachment orders have ceased to have effect after the expiry of period of one year from the date the order had been passed under Section 83(1) of the Act. The Respondents are directed to de-freeze the Petitioner Company s Bank Accounts within three workings days of uploading of the present order - Petition allowed.

Summary

Issues:
Challenge to letter directing bank account freeze/provisional attachment, interpretation of Section 83(2) of CGST Act, 2017.

Analysis:
The High Court heard a petition challenging a letter from the Respondents directing the freezing/provisional attachment of the Petitioner Company's bank accounts. The Petitioner sought a direction to release/de-freeze the accounts. The Petitioner's counsel argued that Section 83(2) of the CGST Act, 2017 stipulates that provisional attachments cease after one year from the order date under Section 83(1). The Respondents' counsel confirmed no fresh attachment order against the Petitioner. Consequently, the Court disposed of the petition, noting that the provisional attachment orders ceased to have effect after one year from the initial order under Section 83(1) of the Act. As a result, the petition was allowed, directing the Respondents to de-freeze the specified bank accounts within three working days of the order's upload.

This judgment primarily dealt with the interpretation of Section 83(2) of the CGST Act, 2017 in the context of a petition challenging a letter from the Respondents directing the freezing/provisional attachment of the Petitioner Company's bank accounts. The Petitioner argued that as per Section 83(2), provisional attachments automatically cease after one year from the date of the order issued under Section 83(1). The Respondents, through their counsel, confirmed that no fresh attachment order had been issued against the Petitioner. In light of this, the Court disposed of the petition, emphasizing that the provisional attachment orders had lost their effect after the expiry of the one-year period from the initial order under Section 83(1) of the Act. Consequently, the Court directed the Respondents to de-freeze the specified bank accounts within three working days of the order's upload.

In conclusion, the judgment provided clarity on the operation of provisional attachment orders under the CGST Act, 2017, specifically focusing on the provisions of Section 83(2). The Court's decision to allow the petition and direct the de-freezing of the Petitioner Company's bank accounts was based on the statutory interpretation of the time limit for provisional attachments as outlined in the Act. This case underscores the importance of adhering to statutory timelines and procedures when imposing and maintaining provisional attachments, ensuring that the rights of the affected parties are duly protected within the legal framework.