2024 (7) TMI 666 - HC - GST

Provisional Bank Account Attachment Under CGST Section 83 Lapses Automatically After One Year Without Extension

HC ruled that provisional attachment of bank account under Section 83 of CGST Act automatically ceased after one year from the original order date. ... Provisional attachment under Section 83 of the CGST Act - Mandatory one-year cessation of provisional attachment - Extension of provisional attachment requiring decision by competent authority - Right of revenue to initiate action in accordance with law despite cessationProvisional attachment under Section 83 of the CGST Act - Mandatory one-year cessation of provisional attachment - Extension of provisional attachment requiring decision by competent authority - Provisional attachment effected by order dated 19.05.2023 ceased to have effect on expiry of one year from that date - HELD THAT: - Subsection (2) of Section 83 of the CGST Act is couched in mandatory terms that every provisional attachment shall cease to have effect after expiry of one year from the date of the order. The Court held that, in the absence of any decision by a competent authority to extend the period of provisional attachment, internal departmental correspondence does not sustain continuation of the attachment. Applying the statutory mandate to the impugned order dated 19.05.2023, the provisional attachment stands terminated on expiry of one year from that date. The Court expressly left open the respondents' ability to take further action against the petitioner in accordance with law notwithstanding the cessation of the provisional attachment. [Paras 7, 8]Impugned provisional attachment order dated 19.05.2023 ceased to have effect on expiry of one year from its date; respondents may nevertheless take action as permitted by law.Final Conclusion: Writ petition disposed of by holding that the provisional attachment dated 19.05.2023 ceased to have effect after one year; no costs; respondents remain free to take any lawful action thereafter. Issues: Challenge to provisional attachment of bank account under Section 83 of the CGST Act.In this judgment delivered by the High Court, the challenge was against the order of provisional attachment of a bank account under Section 83 of the Central Goods and Services Tax Act, 2017. The petitioner argued that the order, dated 19.05.2023, provisionally attaching their bank account should be set aside as it had lost its effect after one year, as per Sub-section (2) of Section 83 of the CGST Act. The respondent, however, failed to extend the provisional attachment within the stipulated time frame. The court examined the mandatory language of the provision, which clearly stated that the provisional attachment ceases to have effect after one year from the date of the order. Consequently, the court held that the provisional attachment order dated 19.05.2023 ceased to have effect after the expiry of one year. The judgment clarified that this decision does not prevent the respondents from taking lawful action against the petitioner. As a result, the Writ Petition was disposed of with no costs, and any pending interlocutory applications were also closed.