Provisional Attachment of Bank Account Under GST Section 83 Quashed as One-Year Limitation Period Had Expired

HC quashed the provisional attachment of petitioner's bank account under Section 83 of CGST Act. The court ruled that the fresh freezing order dated 26.03.2021 (issued after a previous attachment was set aside) had already expired, as Section 83 limits provisional attachments to one year. Additionally, proceedings under Section 74 were no longer pending since an adjudication order had been passed and petitioner had filed an appeal with 10% deposit. The court ordered the attachment lifted and directed notification to the bank.

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Issues:
1. Challenge against the freezing of the petitioner's bank account under Section 83 of the CGST Act.
2. Validity of the fresh order passed after the earlier provisional attachment was quashed.
3. Interpretation of the provision regarding the duration of provisional attachment under Section 83 of the CGST Act.

Analysis:
The High Court addressed the challenge against the freezing of the petitioner's bank account under Section 83 of the CGST Act. The petitioner's account was initially frozen by a provisional attachment order dated 19.05.2020, which was later quashed by the court in a previous order. The petitioner raised concerns about a fresh order freezing the account issued on 26.03.2021 immediately after the earlier order was set aside. The court noted that the proceedings under Section 74 of the CGST Act were no longer pending, as an adjudication order had been passed on 08.09.2021, and the petitioner had filed an appeal while depositing 10% of the tax demanded by the respondent.

Regarding the interpretation of the provision under Section 83 of the CGST Act, the court emphasized that every provisional attachment ceases to have effect after one year from the date of the order. In this case, the impugned order dated 26.03.2021 had lost its efficacy as the period had elapsed. Consequently, the court ordered the attachment to be lifted, disposing of the writ petition in favor of the petitioner. The Registry was directed to dispatch a copy of the order to the petitioner through all permissible modes, including email. Additionally, the respondents were instructed to serve a copy of the order on the bank where the account was frozen. The parties were required to act based on the digitally signed copy of the court order.

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