Bank Account Seizure Under Section 83 Lapses After One Year, Preventing Continued Restrictions on Account Operations

The SC ruled that a Section 83 order for bank account seizure becomes invalid after one year. The court clarified that the bank cannot restrict account operations based on an expired provisional attachment order. The judgment specifically addressed the time limitation of such orders under the Central GST Act, 2017, while preserving the authority's right to issue new attachment orders.

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Issues involved:
The validity of an order u/s 83 of the Central Goods and Service Tax Act, 2017 to seize the outward movement of funds from a bank account after the passage of one year.

Judgment Details:

Issue 1: Validity of order u/s 83 of the Act

The petitioner challenged a communication dated 14.08.2019 issued u/s 83 of the Act to seize funds from a bank account. The petitioner argued that as per Section 83(2), the validity of such an order is one year, and since this period had elapsed, the bank should allow operation of the account. The Court noted that Section 83 empowers the Commissioner to provisionally attach property, including bank accounts, to protect government revenue. However, as per Section 83(2), such attachment ceases after one year. Therefore, the impugned order dated 14.08.2019 had expired and could no longer be enforced. The Court declared that the bank cannot restrict the account based on this order anymore.

The petition was disposed of with the clarification that this decision does not affect any other provisional attachment orders issued by authorities to the bank. If any such order is received by the bank, it must comply regardless of this judgment. The petitioner confirmed not receiving any other attachment orders and reserved the right to challenge any future orders if communicated.

This summary provides a detailed overview of the judgment regarding the validity of an order issued u/s 83 of the Act and its implications on the bank account in question.

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