Provisional attachment orders under Section 83 CGST Act expired after statutory one-year period, seized goods must be returned

Gujarat HC held that provisional attachment orders dated 23.07.2019 under Section 83 CGST Act expired after one year as per statutory provisions. Fresh attachment orders dated 24.07.2020 and 27.07.2020 also outlived their statutory life under Section 83 and Rule 86A(3) CGST Rules 2017. Court found no valid attachment orders existed for bank accounts or input tax credit. Regarding seized goods under Section 67(2), since no notice was issued within six months of seizure and time period expired, authorities were obligated to return goods to original possessor. Application disposed of.

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Issues:
1. Challenge to provisional attachment orders under Section-83 of the CGST Act and Rule-86A of the CGST Rules.
2. Statutory validity and expiry of the provisional attachment orders.
3. Seizure of goods and the obligation to return them within a specified period.

Analysis:

Issue 1: The petitioner challenged the provisional attachment orders under Section-83 of the CGST Act and Rule-86A of the CGST Rules, concerning the attachment of bank accounts and Input Tax Credit.

Issue 2: The Court noted that the provisional attachment orders challenged had outlived their statutory life as per Section-83 of the CGST Act and Rule-86A(3) of the CGST Rules, as they were dated 23.07.2019 and would cease to operate after one year.

Issue 3: The Court highlighted the obligation to return seized goods within a specified period under Section-67(7) of the Act. As no notice was issued within six months of seizure, the authority must return the goods to the owner. The proviso allows for an extension of up to six months on showing sufficient cause.

The Court disposed of the writ-application, noting that as of the current date, there were no attachment orders in force for the petitioner's accounts or Input Tax Credit. The Court emphasized that if the Department wished to take further action, it must do so in accordance with the law. Additionally, the Court directed the authority to address the issue of seized goods, specifically a laptop and a mobile phone, as per the provisions of Section-67(7) of the Act. This order was made without prejudice to the Department's right to initiate further legal actions.

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