2022 (10) TMI 995 - HC - GST

Provisional Bank Account Attachment Under CGST Act Section 83 Expires After One Year, Restoring Operational Rights

The Madras HC ruled on a case involving provisional attachment of a bank account under Section 83 of CGST Act. The court found the attachment order ... Provisional attachment under Section 83 of the Central Goods and Services Tax Act, 2017 - Provisional attachment ceasing to have effect after one year - Effect of expiry of provisional attachment on operation of bank account - Writ petition rendered infructuous by expiry of attachmentProvisional attachment under Section 83 of the Central Goods and Services Tax Act, 2017 - Provisional attachment ceasing to have effect after one year - Effect of expiry of provisional attachment on operation of bank account - Whether the provisional attachment of the petitioner's bank account continued to operate or had ceased by efflux of time under Section 83(2), and the consequential effect on the writ petition. - HELD THAT: - Section 83(1) authorises provisional attachment of property, including bank accounts, to protect revenue, and Section 83(2) provides that every such provisional attachment shall cease to have effect after the expiry of one year from the date of the order of attachment. The impugned order of provisional attachment dated 06.09.2019, passed in Form GST DRC-22, therefore ceased to have effect by efflux of time as noted by the Court. Because the attachment had thus lapsed during the pendency of the writ petition, there remained no subsisting embargo under that order on the operation of the petitioner's bank account.The provisional attachment has ceased to have effect and there is no embargo on the operation of the bank account; the writ petition is rendered infructuous and is disposed.Final Conclusion: The order of provisional attachment dated 06.09.2019 lapsed by efflux of time under Section 83(2) and, accordingly, the petitioner's bank account is free to operate; the writ petition is disposed as infructuous with no order as to costs. Issues:1. Validity of the order of provisional attachment of the petitioner's bank account under Section 83 of the Central Goods and Service Tax Act, 2017.Analysis:The judgment delivered by Honourable Dr. Justice Anita Sumanth of the Madras High Court dealt with the challenge raised by the petitioner against an order issued by the Assistant Commissioner, Goods and Service Tax, attaching the petitioner's current account in ICICI Bank, Chennai. The crux of the matter revolved around the application of Section 83 of the CGST Act, 2017, which allows for provisional attachment of property, including bank accounts, to safeguard the government revenue in specific cases.The Court highlighted that as per Section 83(2) of the CGST Act, the provisional attachment ceases to have effect after one year from the date of the order. In this case, the order in question was dated 06.09.2019, making it ineffective as of 15.09.2020. Consequently, the Court declared the writ petition as infructuous due to the expiration of the attachment period, thereby allowing the petitioner to resume operations related to the bank account without any hindrance.The judgment emphasized that with the lapse of the attachment period, there was no legal impediment for the petitioner to operate the bank account freely. As a result, the Court disposed of the writ petition with the observation that there were no costs incurred in the proceedings. The connected miscellaneous petitions were also closed as part of the final disposition of the case.In conclusion, the High Court of Madras, through the judgment delivered by Honourable Dr. Justice Anita Sumanth, clarified the implications of Section 83 of the CGST Act in the context of provisional attachment of assets to protect government revenue. The ruling underscored the automatic cessation of the attachment after one year, leading to the dismissal of the writ petition and allowing the petitioner to resume normal banking operations.