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of <h1>Provisional CGST attachment cannot be reissued or renewed after one-year lapse under s.83(1)-s.83(2); orders invalid</h1> <h3>KESARI NANDAN MOBILE Versus OFFICE OF ASSISTANT COMMISSIONER OF STATE TAX (2), ENFORCEMENT DIVISION – 5</h3> KESARI NANDAN MOBILE Versus OFFICE OF ASSISTANT COMMISSIONER OF STATE TAX (2), ENFORCEMENT DIVISION – 5 - 2025 INSC 983 1. ISSUES PRESENTED AND CONSIDERED 1. Whether, after a provisional attachment order issued under Section 83(1) of the CGST Act ceases to have effect by operation of Section 83(2) upon expiry of one year, the revenue authority is empowered under the CGST Act, CGST Rules, or any other law/executive instruction to issue a second provisional attachment order in respect of the same property or bank account. 2. Whether issuance of a fresh provisional attachment order based on substantially the same satisfaction note or grounds as an earlier order that has lapsed amounts to an impermissible 'renewal' that circumvents the statutory limitation in Section 83(2) and violates principles of statutory interpretation and due process. 3. Whether any doctrine (including inherent executive power or analogous provisions in other taxing statutes) permits the executive to supply an omission in the CGST Act by issuing or re-issuing attachment orders where the statute is silent on renewal or extension. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Power to issue a second provisional attachment after lapse of the one-year period under Section 83(2) Legal framework: 1. Section 83(1) CGST Act: Commissioner may provisionally attach property, including bank accounts, where he forms an opinion it is necessary to protect revenue. 2. Section 83(2) CGST Act: 'Every such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the order made under sub-section (1).' 3. Rule 159 CGST Rules prescribes manner/form of attachment and provides for release on Commissioner's written instruction; Rule 159(5) permits filing of objection and hearing; Rule 159(2) requires written instruction to remove encumbrance. Precedent treatment: 1. Radha Krishan Industries v. State of Himachal Pradesh: this Court emphasised the draconian nature of Section 83(1), the need for strict compliance with statutory preconditions and formation of a proximate, live nexus to the protection of government revenue; endorsed as guiding principle for sub-section (1). 2. RHC Global Exports (interim order): this Court (single-order interim) de-frozen account after one year; court concurs respectfully with its view. 3. Kerala High Court in Ali K. (approved): held absence of enabling provision in Section 83 permitting re-issuance after lapse; refused to follow Gujarat High Court reasoning that no embargo exists. Interpretation and reasoning: 1. Literal reading of Section 83(2) yields that any provisional attachment ceases after one year; no express provision for extension, renewal or re-issuance is contained in the section. 2. The draconian nature of Section 83(1) requires that statutory limitations (Section 83(2)) be given force; permitting re-issuance would render sub-section (2) otiose and undermine the legislative limitation (ut res magis valeat quam pereat). 3. Executive inherent powers cannot be used to supplant or contradict statutory provisions; while executive may fill lacunae where rules are silent, it may not act inconsistently with clear statutory text. Absence of any executive instruction authorising renewal consistent with legislative policy precludes justification on that basis. 4. Comparison with other statutes (Excise Act Section 11DDA and Customs Act Section 28BA) where express extension/renewal provisions exist demonstrates deliberate legislative choice not to allow extension under CGST; by negative implication, Parliament did not intend renewal. Ratio vs. Obiter: 1. Ratio: A provisional attachment under Section 83 ceases by operation of law after one year and, in absence of statutory provision or valid executive instruction authorising renewal, the revenue has no power to re-issue or 'renew' a provisional attachment in respect of the same property once the earlier order has lapsed. 2. Obiter: Discussion on the role of the GST Council agenda recommending amendments to Rule 159 and examples of systemic non-compliance by banks reflecting practical difficulties are illustrative but not essential to the holding on statutory power. Conclusions: 1. It is not open to the authority to issue a second or renewed provisional attachment order after the earlier order has ceased by operation of Section 83(2); such issuance is ultra vires and impermissible. 2. The statutory bar cannot be circumvented by administrative practice or by invoking an inherent executive power inconsistent with the statute. Issue 2: Legality of re-issuance based on substantially same grounds and failure to decide representation under Rule 159(5) Legal framework: 1. Rule 159(5) CGST Rules: person whose property is attached may file objection in specified form and Commissioner may, after hearing, release the property by order in FORM GST DRC-23. Precedent treatment: 1. Radha Krishan Industries: strict and punctilious observance of statutory preconditions; formation of opinion must have proximate nexus to revenue protection. Interpretation and reasoning: 1. Issuing a fresh provisional attachment on substantially the same satisfaction note or grounds as an earlier lapsed order (without fresh formation of opinion based on new facts) would amount to indirect achievement of what Section 83(2) forbids-i.e., circumventing the statutory lapse. 2. The principle that an act which cannot be done directly cannot be done indirectly applies: re-issuance on same basis would be abuse of power and contrary to due process. 3. Failure to decide the representation filed under Rule 159(5) before issuing a subsequent attachment order aggravates infirmity because the statutory objection mechanism must be respected; non-disposal cannot validate re-attachment. Ratio vs. Obiter: 1. Ratio: Re-attachment premised on substantially identical grounds as an earlier order that has lapsed is unlawful; the Commissioner must form a fresh, independent opinion with proximate nexus to revenue protection and must respect the objection/representation procedure under Rule 159(5). Conclusions: 1. Re-issuance on substantially the same satisfaction note or without disposing the representation is impermissible and constitutes misuse/abuse of power; such orders are liable to be set aside. Issue 3: Role of executive instructions and alignment between Rules and Act; remedial/amendatory steps Legal framework and reasoning: 1. Where statute prescribes a clear provision, rules or executive instructions must be consistent and cannot contravene statutory mandate (Article 13 principle referenced). 2. Rule 159(2)'s requirement that removal of encumbrance is on written instruction from Commissioner created a procedural misalignment with Section 83(2) (automatic lapse after one year). The GST Council has recognised the misalignment and recommended amendments to Rule 159 and FORM GST DRC-22 to align rules with the Act. Precedent treatment: 1. Courts have recognised systemic difficulties arising from procedural misalignment (cases cited by the Court illustrating continued debit-freeze beyond statutory lapse) and the need for compliance with statute pending amendment. Ratio vs. Obiter: 1. Ratio: Until rules are aligned with the Act, authorities must implement provisional attachments in strict compliance with Section 83(2); absence of alignment does not empower continued encumbrance beyond one year. Conclusions: 1. Executive or rule-making bodies may amend procedure to effectuate statutory intent, but pending such lawful amendments, the statutory one-year lapse must be respected and enforced by authorities and banks. Cross-references 1. The considerations under Issue 1 (statutory bar on renewal) inform Issue 2 (impermissibility of re-issuance on same grounds) and Issue 3 (requirement that rules and executive action conform to statutory text). Final Dispositive Conclusion (Ratio Summarised) 1. The Court holds that Section 83(2) of the CGST Act operates to terminate a provisional attachment after one year and, in absence of express statutory power or valid executive instruction authorising renewal, the revenue cannot lawfully re-issue or 'renew' provisional attachment orders in respect of the same property or bank accounts once the earlier orders have lapsed; issuance of such subsequent orders based on the same grounds or without disposing representations is ultra vires and liable to be set aside.
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