Revenue department cannot issue successive provisional attachment notices without fresh justification for each subsequent attachment under Section 83

HC quashed provisional attachment order after one-year expiry period. Court held that revenue department cannot issue successive attachment notices without providing fresh reasons for each subsequent attachment. Following SC precedent, department must justify specific reasons for second provisional attachment under Section 83. Court ruled that allowing continuous attachments without fresh justification would render statutory time limit meaningless and make provision arbitrary. Provisional attachment being drastic preventive measure requires proper justification. Bank directed to remove attachment and restore account access.

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Issues:
1. Validity of provisional attachment order under Section 83 of the Central Goods and Service Tax Act, 2017.
2. Requirement of fresh reasons for a second provisional attachment of a bank account.
3. Compliance with statutory provisions and principles of natural justice in issuing provisional attachment orders.

Analysis:
The High Court heard arguments from both parties regarding a writ petition challenging a provisional attachment order dated May 16, 2024, issued under Section 83 of the Central Goods and Service Tax Act, 2017. The petitioner contended that a previous attachment order on the same bank account had been removed after a writ petition, and the subsequent attachment lacked fresh reasons and specificity. The Court noted that the arbitrary action of attaching the account without fresh reasons was draconian and unsustainable under the law. Referring to the Supreme Court's ruling in Radha Krishan Industries vs. State of Himanchal Pradesh, the Court emphasized the necessity of providing fresh reasons for a second attachment and the importance of strict compliance with statutory requirements for provisional attachments. The Court highlighted the need for tangible material supporting the necessity of an attachment to protect government revenue.

The Court further discussed the provisions of Section 83 of the Act, emphasizing that a provisional attachment ceases to have effect after one year. It cautioned against allowing repeated attachments without fresh reasons, as it would render the statutory provision meaningless. Citing a judgment from the Calcutta High Court, the Court underscored the importance of responsible tax collection and the need for drastic measures to prevent tax evasion. The Court stressed that the provision for provisional attachment should not be taken lightly, likening it to preventive detention in criminal cases.

In conclusion, the Court found that the Department failed to justify the second provisional attachment with specific reasons, rendering it illegal, arbitrary, and non-existent in law. Therefore, the Court quashed the provisional attachment order dated May 16, 2024, directing the bank to remove the attachment and grant the petitioner access to the account. The Department was given liberty to proceed in accordance with the law. The writ petition was allowed in favor of the petitioner.

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