Bank Account Seizure Under CGST Section 83 Lapses After One Year, Provisional Attachment Automatically Terminated HC ruled that provisional attachment of bank accounts under Section 83 of CGST Act automatically ceases after one year. The court ordered return of bank ...
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Bank Account Seizure Under CGST Section 83 Lapses After One Year, Provisional Attachment Automatically Terminated
HC ruled that provisional attachment of bank accounts under Section 83 of CGST Act automatically ceases after one year. The court ordered return of bank guarantee to petitioners and clarified that future legal proceedings remain open. The provisional attachment was deemed invalid after the one-year statutory period, providing relief to the petitioners.
Issues involved: Challenge to order provisionally attaching bank accounts under Section 83 of the Central Goods and Service Tax Act, 2017.
Summary: The High Court of Bombay heard a petition challenging an order dated 7th March 2022, which provisionally attached the petitioners' bank accounts under Section 83 of the CGST Act. The petition argued that as per Section 83(2) of the Act, such provisional attachments cease to have effect after one year from the date of the order. The court noted that Section 83 empowers the Commissioner to attach properties, including bank accounts, to protect the government revenue. The provision specifies that any provisional attachment shall cease to have effect after one year. Therefore, if a provisional attachment exceeds one year, it cannot continue. The court agreed with the petitioner's contention that the provisional attachment of their bank accounts ceased to operate after one year from the order date.
In compliance with a previous court order, the petitioners had provided a bank guarantee, but since the provisional attachment had ceased to operate, the court ordered the return of the bank guarantee to the petitioners. The court clarified that its order was specific to the provisional attachment of the bank account and that any future proceedings initiated against the petitioners should be adjudicated in accordance with the law. All contentions regarding such future proceedings were expressly kept open. The court disposed of the writ petition based on the above observations, without imposing any costs.
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