2022 (10) TMI 952 - HC - GST

Provisional attachment of Bank Accounts - respondent fairly admitted that time period of one year is over - section 83 of the Central Goods and Services Tax Act, 2017 - HELD THAT - as contemplated in section 83 of the CGST Act, the provisional attachment of the seven bank accounts out of total nine bank accounts, gets automatically come to an end. Learned advocate for the petitioners makes a grievance that despite one year is over, the banks are not intimated about the seizing of the provisional attachment - the respondents stated that the authorities will intimate the banks concerned in this regard to enable the operation of the bank accounts by the petitioners within one week from today. In respect of the two bank accounts where the fresh orders of provisional attachment are passed, it will give fresh cause of action in accordance with law - the petitions are disposed of.

Summary

Issues:
Provisional attachment of bank accounts under section 83 of the Central Goods and Services Tax Act, 2017.

Analysis:
The judgment dealt with multiple petitions concerning the provisional attachment of bank accounts by authorities under section 83 of the CGST Act. The petitions raised concerns about the orders dated 11.3.2021 and 12.10.2021, which attached bank accounts held by the petitioners with specific banks. The prayer in one of the petitions sought to set aside these orders and release the attached accounts. It was noted that representation to unfreeze the accounts had been rejected, leading to the challenge in court. The main issue revolved around the legality and validity of the provisional attachment orders.

During the hearing, it was acknowledged that the one-year period for provisional attachment had lapsed for seven out of nine bank accounts, as per the provisions of section 83 of the CGST Act. Consequently, the provisional attachment for these seven accounts automatically ceased to have effect. The court took note of an email communication confirming the end of attachment for these accounts due to the expiry of the one-year period. However, there was a complaint from the petitioners that the concerned banks had not been informed about the release of the attachment, which the authorities assured would be done promptly.

Regarding the two remaining bank accounts for which fresh attachment orders were issued, it was clarified that these fresh orders would provide a new cause of action in accordance with the law. The court disposed of all the petitions based on these observations and directions, with notices in each petition being discharged subject to the above determinations. The judgment emphasized the importance of complying with legal provisions and ensuring timely communication to affected parties regarding the status of provisional attachments on bank accounts.

In conclusion, the judgment addressed the grievances raised by the petitioners regarding the provisional attachment of their bank accounts under the CGST Act. It clarified the legal implications of the one-year period for such attachments and highlighted the necessity of promptly informing banks about the release of provisional attachments. The court's decision provided clarity on the status of the bank accounts in question and underscored the importance of adherence to statutory provisions in such matters.