2022 (2) TMI 779 - HC - GST

Provisional Attachment Order Under GST Section 83 Expires After One Year, Bank Account Must Be Released

INDRAJEET RAMYASH PANDE Versus STATE OF GUJARAT

The HC addressed a challenge to a provisional attachment order under GST Act Section 83 that froze the assessee's IDBI Bank account. The Court determined ... Attachment of Bank accounts - section 83 of GST Act read with Rules 159 - HELD THAT:- It is seriously disputed by Mr. Trivedi that such order of provisional attachment was served on his client. It is only upon receipt of the intimation from the Bank that his client realized that the bank account has been provisionally attached - This writ application need not be adjudicated further because the statutory life of the order of provisional attachment of the bank account has come to an end. The intimation of the Bank is dated 20.01.2021. This would necessarily imply that the order of provisionally attachment must have been passed by the Office of the Deputy Commissioner any time before 20th. One year period has already elapsed. As on date, the order of provisional attachment cannot be said to be in-force. The IDBI Bank shall now permit the writ applicant to operate his bank account. This is without prejudice to the rights of the department to initiate any further action, if they intend to in accordance with law - Application disposed off. Issues:Provisional attachment of bank account under Section 83 of GST Act - Dispute regarding service of attachment order - Statutory life of attachment order - Relief sought to quash attachment and lift the freeze on bank account.Analysis:The judgment pertains to a writ application under Article 226 of the Constitution of India where the writ applicant, an assessee, sought relief from the High Court to quash the order passed under Section 83 of the GST Act, which provisionally attached their bank account maintained with IDBI Bank. The applicant received intimation from the bank regarding the attachment, disputing that the order was not served directly. The Court heard arguments from both parties represented by Mr. Hiren Trivedi and Mr. Utkarsh Sharma, respectively.The Court noted that the statutory life of the provisional attachment order had expired as the intimation from the bank was dated 20.01.2021, indicating that the attachment order must have been passed before that date. Since a year had elapsed, the order of provisional attachment was no longer in force. Consequently, the Court directed the IDBI Bank to allow the writ applicant to operate the bank account, without prejudice to any further actions the tax department may take in accordance with the law.In conclusion, the Court disposed of the writ application, granting the relief sought by the applicant to lift the freeze on the bank account.