Court rules bank account attachment exceeding one year unlawful. Emphasizes statutory timelines and procedural compliance.

The court held that the provisional attachment of the bank accounts exceeding one year was unlawful. Emphasizing the statutory timeline for such attachments, the court set aside the attachment, directing the immediate unfreezing of the petitioners' accounts. The decision focused on procedural compliance, legality of the attachment, and refrained from commenting on the investigation itself. The judgment underscored the importance of adhering to statutory timelines and proper procedural requirements in cases involving provisional attachments.

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Issues:
Provisional attachment of bank account exceeding one year.

Analysis:
The writ petition challenges a letter issued by the Directorate of Revenue Intelligence requesting the debit-freeze of the petitioners' bank account in connection with an investigation into the import of precious stones. The respondents allege that the petitioners engaged in over-invoicing of rough precious stones to evade customs duty, with imports amounting to Rs. 2000 crores. Despite summonses and non-cooperation from the petitioners, the investigation remained inconclusive. The petitioners deny the allegations. The main issue raised is whether a provisional attachment of a bank account can be continued beyond one year.

The judgment refers to Section 110 of the Customs Act, which allows provisional attachment of bank accounts for a maximum of one year, extendable for another six months with reasons recorded in writing. Citing previous cases, the court emphasizes strict compliance with the procedural requirements for such attachments. The court in M/s. Boxster Impex Pvt. Ltd. Vs. Union of India held that the provision has prospective application from 01.08.2019 and outlined the necessary pre-conditions for invoking the provision. Similarly, in Samyak Jewels Pvt. Ltd. Vs. Union of India, it was clarified that provisional attachment is temporary, and the statute provides a definite timeline for such attachments.

The court found no justification to continue the provisional attachment beyond the permissible period. It noted the absence of any order extending the attachment period and highlighted the unlawful nature of the continued attachment post the one-year limit. The judgment set aside and quashed the impugned letter, directing the immediate unfreezing of the petitioners' bank accounts. The decision emphasized the legality and validity of the attachment, refraining from commenting on the investigation itself, and urged cooperation from the petitioners.

In conclusion, the writ petition was allowed, and the provisional attachment of the bank accounts was deemed unlawful and set aside. The judgment underscored the importance of adherence to statutory timelines for provisional attachments and highlighted the necessity for proper orders and compliance with procedural requirements in such cases.

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