2024 (3) TMI 834 - HC - GST

Judicial Review Allows Challenge to Tax Authority's Cash Credit Account Attachment Under CGST Section 83

SC disposed of the petition challenging provisional attachment of cash credit accounts under CGST Act Section 83. The court acknowledged expiration of ... Attachment of Bank Account - Orders passed u/s 83(1) of the CGST Act - Period of limitation - repeated issuance of provisionally attachment order - cash credit accounts - HELD THAT:- Learned counsel for the petitioners submits that repeated attachment of cash credit accounts in exercise of power u/s 83 of the CGST Act is in breach of the provisions of Section 83(2) and such exercise could not have been undertaken. He further submits that petitioners have not received copies of attachment order dated 13.12.2023. Admittedly, the order subject matter of these proceedings has ceased to operate, the petition is disposed of reserving the right of the petitioner to impugn the fresh attachment order dated 13.12.2023 in accordance with law. The question of validity of repeated issuance of attachment orders u/s 83 of the CGST Act is left open. All rights and contentions of parties are reserved. Issues involved: Impugning order u/s 83 of CGST Act provisionally attaching cash credit accounts, validity of repeated attachment orders, failure to receive copies of attachment order.Impugning order u/s 83 of CGST Act:The petitioner challenged the order dated 04.08.2022 passed u/s 83 of the CGST Act, provisionally attaching the cash credit accounts. The petitioner's counsel argued that as per Section 83(2) of the CGST Act, the maximum period for attachment of cash credit accounts is one year from the date of the order under Section 83(1). Since the orders had expired, the petitioner should be allowed to operate the cash credit accounts. The respondents' counsel acknowledged that orders under Section 83(1) have a lifespan of one year and no longer apply after that period.Validity of repeated attachment orders:The respondents issued a fresh attachment order on 13.12.2023, once again provisionally attaching the cash credit accounts under Section 83(1) of the CGST Act. The petitioner's counsel contended that repeated attachment of cash credit accounts violates Section 83(2) and asserts that they did not receive copies of the attachment order dated 13.12.2023. The court disposed of the petition, allowing the petitioner to challenge the fresh attachment order separately. The legality of repeatedly issuing attachment orders under Section 83 of the CGST Act was left unresolved.Failure to receive copies of attachment order:The petitioner raised concerns about not receiving copies of the attachment order dated 13.12.2023. This issue was not conclusively addressed in the judgment, as the focus was on the validity of the attachment orders and the petitioner's right to challenge the fresh order separately. All rights and contentions of the parties were reserved for future proceedings.