2023 (6) TMI 184 - HC - GST

Provisional Tax Attachment Orders Invalidated After One-Year Limit, Banks Must Release Frozen Accounts Immediately

HC ruled that provisional attachment orders under CGST Act expired after one year, rendering the bank account attachments invalid. The court directed ... Provisional Attachment of Bank Accounts - order passed without any reason to believe that such an order is necessary for protecting the interest of the Revenue - period of one year has expired since the date of the impugned order and in terms of Sub-section (2) of Section 83 of the CGST Act - HELD THAT:- It is not considered apposite to pass any further orders except to direct that the petitioner would not be impeded to operate the bank accounts, on account of the impugned order. The petitioner has also filed a list of fifteen bank accounts including the bank accounts maintained with IndusInd Bank which were attached by separate orders passed on 20.04.2022. Mr. Singla fairly states that although the said bank accounts as set out in the Annexure P-62 of the petition, have been provisionally attached by the separate orders, the said orders have also ceased to be operative by efflux of time, by virtue of Section 83(2) of the CGST Act. This Court considers it apposite to direct that the concerned banks shall not obstruct operation of the bank accounts on account of the provisional attachment orders dated 20.04.2022. Petition disposed off. Issues involved:The issues involved in the judgment are the validity of the impugned order provisionally attaching bank accounts under the Central Goods and Services Tax Act, 2017.Impugned Order Challenge:The petitioner challenged an order dated 20.04.2022, which provisionally attached bank accounts, arguing that it was passed without sufficient reason and in excessively wide terms. The order not only targeted the petitioner's accounts but also those of immediate family members and related entities, which was deemed beyond the powers of Section 83 of the CGST Act.Operative Period of Attachment Orders:The respondents contended that the provisional attachment order had expired after one year from its issuance, as per Sub-section (2) of Section 83 of the CGST Act. Consequently, the court decided not to issue further orders, allowing the petitioner to operate the bank accounts without hindrance due to the impugned order.Additional Bank Accounts Attachment:The petitioner listed fifteen bank accounts, including those with IndusInd Bank, which were separately attached on 20.04.2022. The respondents acknowledged that these accounts had also ceased to be under attachment due to the passage of time as per Section 83(2) of the CGST Act.Court's Decision:Given the expiration of the attachment orders and the lack of ongoing necessity, the court directed the concerned banks not to obstruct the operation of the bank accounts. Consequently, the petition was disposed of on these terms.