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of <h1>Provisional attachment order extended illegally under CGST Act, 2017 deemed unsustainable. Bank account operation restored.</h1> <h3>M/s. KMC Constructions Limited and Another Versus Principal Commissioner of Central Tax and 4 Others</h3> M/s. KMC Constructions Limited and Another Versus Principal Commissioner of Central Tax and 4 Others - 2020 (43) G.S.T.L. 44 (Telangana), [2021] 84 G ... Issues:Provisional attachment of bank account exceeding prescribed period under CGST Act, 2017.Analysis:The petitioners challenged the continuation of a provisional attachment order issued by the 2nd respondent on 07.06.2019, which attached the petitioner's company's bank account, even after the expiry of the one-year period mandated under Section 83(2) of the CGST Act, 2017. The petitioners contended that such continuation was illegal, arbitrary, and violated various articles of the Indian Constitution. They relied on judgments from the Karnataka High Court and the Gujarat High Court, which held that a bank account's provisional attachment cannot extend beyond the one-year period specified under the Act. The Senior Counsel for Central Taxes acknowledged this legal position but argued that since the matter was at the show-cause notice stage and money was present in the bank account, the respondents should be allowed to issue a fresh provisional attachment order.The High Court observed that the main issue in the Writ Petition revolved around the provisional attachment order dated 07.06.2019 and its continuation beyond 06.06.2020, which contravened Section 83(2) of the CGST Act, 2017. It was undisputed that the attachment could not persist beyond one year from the original order date. Consequently, the court held that the continuation of the provisional attachment order beyond the prescribed period was in violation of constitutional provisions and lacked jurisdiction. Therefore, the impugned order was deemed unsustainable after 06.06.2020, and the court directed the respondent bank to allow the petitioner to operate the bank account immediately. The Writ Petition was allowed with no costs, and any related pending petitions were to be closed accordingly.
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