2022 (6) TMI 602 - HC - GST

Provisional attachment of Bank Accounts - time limitation - Section 83 of the Central Goods and Services Tax Act, 2017 - HELD THAT - Section 83 of the CGST Act provides for provisional attachment to protect revenue in certain cases - As per Sub-Section (2) of Section 83 of the CGST Act, every such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the order made under Sub-Section (1) of Section 83 of the CGST Act. In the instant case, provisional attachment was ordered on 09.02.2021. Thus, the period of one year has expired. Though a statement has been made in the counter affidavit that the provisional attachment was reviewed by the Commissioner on 11.03.2022 whereafter such attachment for further period was approved, no such order has been placed on record. In any case, Sub-Section (2) of Section 83 of the CGST Act is very clear. Every provisional attachment made under Sub-Section (1) of Section 83 of the CGST Act shall cease to have effect after expiry of a period of one year from the date of the order made under Sub-Section (1) of Section 83 of the CGST Act. Continuance of the impugned order of provisional attachment dated 09.02.2021 cannot be sustained. The same is accordingly set aside and quashed - Petition disposed off.

Summary

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

Analysis:
The petitioners sought the quashing of a letter invoking power under Section 83 of the CGST Act, provisionally attaching their bank account. The order of provisional attachment dated 09.02.2021 had expired after one year. The court had previously directed to list the matter for further hearing. Respondent Nos.1 & 2 filed an affidavit stating that the provisional attachment was justified due to a fraudulent refund claim by the petitioners, and it was reviewed and approved for further attachment by the Commissioner. Section 83 of the CGST Act allows provisional attachment to protect revenue, with the effect ceasing after one year from the date of the order. Despite the review and approval for further attachment, the court held that the continuation of the provisional attachment beyond one year was unsustainable. Therefore, the impugned order of provisional attachment was set aside and quashed, directing the respondents to de-attach the bank account of the petitioners. The court disposed of the writ petition without any order as to costs, closing any pending miscellaneous applications in the matter.