2023 (6) TMI 634 - HC - GST

Provisional Attachment Under CGST Act Section 83 Automatically Lapses After One Year, Mandating Account Release

The SC examined provisional attachment orders under Section 83 of the CGST Act. The court found that provisional attachment orders automatically cease ... Provisional Attachment of Bank Account of petitioner - validity of attachment order after expiry of one year from the date of Order as per Section 83(2) of CGST Act - HELD THAT:- It is noticed that in terms of Section 83(2) of the Central Goods and Services Tax Act, 2017 (for short 'the Act') the provisional attachments orders by operation of law ceases of have effect after the expiry of a period of one year from the date of the order made under Sub-Section (1). Admittedly, in the present case, the period of one year from the passing of the provisional orders of attachment has expired as evident from the details furnished and the provisional orders of attachment automatically by operation of law have been ceased to be in operation. The impugned orders of attachment at Annexures-A, A1, A2, A4 and A5 are declared to be no longer in operation from the expiry of the period of one year as stipulated under Section 83(2) of the Act. The Bank authorities to take note of the same forthwith. Petition disposed off. Issues:The judgment involves the correctness of provisional attachment orders under Section 83 of the CGST Act, challenges to multiple bank account and trade debt attachments, and the effect of Section 83(2) on the duration of provisional attachment orders.Provisional Attachment Orders:The petitioner challenged the provisional attachment of bank accounts and trade debts issued by the 1st Respondent under Section 83 of the CGST Act. The prayer sought to set aside multiple provisional attachment orders concerning different bank accounts and trade debts. The respondent argued that the provisional attachment orders cease to have effect after one year from the date of the order, as per Section 83(2) of the Act. Additionally, a Show Cause Notice had been issued to the petitioner, which was pending adjudication. The respondent contended that due to the expiry of the provisional attachment orders and the issuance of the Show Cause Notice, the writ petition had become infructuous.Effect of Section 83(2):The Court noted that as per Section 83(2) of the CGST Act, provisional attachment orders automatically cease to have effect after one year from the date of the order. In the present case, the period of one year from the passing of the provisional attachment orders had expired, rendering the impugned orders of attachment no longer in operation. The Court directed the bank authorities to take note of this and declared the provisional attachment orders at Annexures-A, A1, A2, A4, and A5 to be no longer in operation. Consequently, the petition was disposed of.