Court Orders Banks to Defreeze Accounts, Citing Precedent Case on Attachment Rules

The court ruled in favor of the petitioners, directing the respondents to defreeze the bank accounts that were provisionally attached under Section 83 of the PGST Act. The court held that the attachment ceased to have effect after one year from the date of the order, as clarified in a previous case. Emphasizing the legal position established in the precedent case, the court ordered the banks to allow the petitioners to operate their accounts immediately, citing constitutional validity under relevant articles.

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Issues:
1. Provisional attachment of bank accounts under Section 83 of the PGST Act.
2. Validity of continuing attachment beyond the statutory period.
3. Interpretation of Section 83(2) of the PGST Act.
4. Constitutional validity under Articles 14, 19(1)(g), 21, 265, and 300-A.

Analysis:
1. The judgment involved two petitions seeking a mandamus to direct the Deputy Excise & Taxation Commissioner to permit the operation of bank accounts and defreeze them as they were provisionally attached under Section 83 of the PGST Act. The petitions contended that the continuation of the attachment was illegal and arbitrary.

2. The petitioner firm, engaged in the sale of ferrous metal, had its bank accounts provisionally attached after a search and inspection by State GST authorities. The petitioner sought relief as the attachment continued beyond the statutory period of one year. The petitioner sent legal notices and sought permission to operate the accounts, citing previous judgments on the limitation of provisional attachments.

3. The court referred to the case of A.P. Steels, which clarified the provision of Section 83(2) of the CGST Act. The court held that provisional attachment ceases to have effect after one year from the date of the order. In this case, the attachment order dated 13.06.2019 ceased to operate after 27.05.2020. Consequently, the court directed the respondents to defreeze the bank accounts within a specified period.

4. The judgment upheld the petitioner's contentions, emphasizing the legal position established in A.P. Steels' case. The court allowed both writ petitions, ordering the banks to permit the petitioners to operate their bank accounts immediately. The decision was based on the interpretation of Section 83(2) of the PGST Act and the constitutional validity under Articles 14, 19(1)(g), 21, 265, and 300-A.

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