2020 (3) TMI 617 - HC - GST

Court rules bank account attachment under CGST Act lapses after one year, directs attachment lift on Fixed Deposit submission.

Badal Shambhubhai Shah Versus The Directorate General Of Goods And Service Tax Intelligence, Zonal Unit, Ahmedabad

The Court ruled that under Section 83 of the CGST Act, bank account attachment cannot continue after one year unless renewed. The provisional attachment ... Provisional attachment of Petitioner's Bank Accounts - time limitation of continuation of such order - whether after the expiry of period of one year from the date of passing of the provisional attachment order, under Section 83 of the Central Goods and Service Tax Act, 2017, the attachment over the bank account of the petitioner can continue? HELD THAT:- The provision of Sub-section (2) of Section 83 of the Act, 2017 is very clear in this regard. No attachment over the bank account can continue after the period of one year from the date of passing of the order under Section 83 of the Act, 2017, unless such order is renewed or fresh order is passed by the authority. The respondent Nos.3 and 4-Banks are directed to lift the attachment over the accounts of the petitioner, placed by the respondent No.1, by virtue of order dated 10.01.2019 passed under Section 83 of the Act, 2017 - Petition disposed off. Issues Involved:1. Interpretation of Section 83 of the Central Goods and Service Tax Act, 2017 regarding the continuation of bank account attachment after one year.2. Consideration of the petitioner's challenge to the provisional attachment order and the conditions of bail granted.Analysis:Issue 1: Interpretation of Section 83 of the CGST Act, 2017The Court considered whether the attachment over the petitioner's bank accounts could continue after the expiry of one year from the date of the provisional attachment order under Section 83 of the Act. The Court noted that as per Section 83(2) of the Act, no attachment over a bank account can continue after the one-year period unless the order is renewed or a fresh order is passed by the authority. The provisional attachment order in this case was issued on 10th January 2019, and since the one-year period had lapsed on 10th January 2020, the impugned order had automatically lapsed.Issue 2: Challenge to Bail Conditions and ResolutionThe respondent argued that due to the petitioner's arrest and bail being granted on the condition of depositing a certain amount, the attachment should be continued in the interest of revenue. However, the petitioner had challenged the bail condition before the Court for modification. The petitioner, on their part, had submitted an application offering to issue a Fixed Deposit of the required amount to lift the attachment. Eventually, the parties reached a consensus where the respondent agreed to accept the Fixed Deposit receipt to lift the attachment over the petitioner's bank accounts.In light of the agreement between the parties, the Court directed the banks to lift the attachment over the petitioner's accounts and instructed the petitioner to hand over the original Fixed Deposit receipt. The petition was disposed of accordingly, with the rule made absolute to the specified extent.This analysis highlights the Court's interpretation of the statutory provision, consideration of the petitioner's challenge to bail conditions, and the resolution reached between the parties resulting in the lifting of the attachment over the bank accounts.