Provisional Attachment of Bank Account Under GST Section 83 Cannot Extend Beyond One Year

The HC ruled that provisional attachment of a bank account under Section 83 of CGST Act cannot continue beyond one year from the date of order. Citing a SC judgment in Civil Appeal No.1155/2021 and CBIC circular dated 23.02.2021, the court determined that the attachment in question had exceeded the statutory one-year limitation and was therefore no longer effective. The HC granted interim relief by staying the attachment order and allowed the addition of the adjudicating officer as a respondent, with further proceedings scheduled to address remaining prayers.

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Issues:
1. Provisional attachment of bank account under Section 83 of the CGST Act.
2. Duration of provisional attachment as per sub-section (2) of Section 83.
3. Interpretation of the Supreme Court judgment in Civil Appeal No.1155/2021.
4. Impact of CBIC circular dated 23.02.2021 on the duration of provisional attachment.
5. Stay of the provisional attachment order.
6. Granting leave to join the concerned adjudicating officer as an additional respondent.
7. Scheduling further consideration of the petitioner's prayers.

Analysis:
The High Court addressed the issue of provisional attachment of the petitioner's bank account under Section 83 of the CGST Act. It was noted that the provisional attachment was ordered by the respondents to protect the government revenue in pending proceedings. However, the counsel for the petitioner highlighted that as per sub-section (2) of Section 83, such provisional attachment cannot remain in effect beyond one year from the date of the order made under sub-section (1).

The Court referred to the provisions of Section 83 of the CGST Act, emphasizing the power of the commissioner to order provisional attachment in certain cases to safeguard government revenue. Citing a recent Supreme Court judgment in Civil Appeal No.1155/2021, the Court discussed the powers of provisional attachment and the inherent limitations as safeguards. It was established that the provisional attachment ceases to have effect after the expiry of one year from the date of the order made under sub-section (1).

Furthermore, the Court considered the impact of a circular issued by the CBIC on the duration of provisional attachment. The circular dated 23.02.2021 clarified that every provisional attachment shall cease to have effect after the completion of one year from the date of the attachment order. In the present case, since the order of attachment was issued more than a year ago, it was deemed ineffective upon the completion of the one-year period.

As a result, the Court provided interim relief by staying the provisional attachment order. Additionally, the Court granted leave to join the concerned adjudicating officer as an additional respondent and directed the amendment of the cause title within a week. A notice was to be issued to the newly added respondent returnable on 22.03.2022 for further proceedings regarding the petitioner's prayers. The matter was scheduled for consideration on the same date to address the remaining prayers of the petitioner comprehensively.

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