2026 (2) TMI 220 - HC - GST

Provisional attachment of bank accounts under the Act: expiry after one year renders attachment nonoperational, relief granted.

Provisional attachment under the Act lapses after one year, rendering attached assets nonoperational once the statutory period expires; therefore an ... Provisional attachment - expiry of provisional attachment after one year u/s 83(2) - operational effect of provisional attachment - requirement of specific order to attach a bank account - HELD THAT:- It is claimed by him that since the said account is clubbed with the PAN Card Number which is referred to in the order of provisional attachment dated 3rd June, 2024, the said account also stood provisionally attached. From the record, we hardly find any justifiable material including that of an order under Section 83 of Act thereby attaching the said Savings Bank Account. Even if the Form, which is provided under the Act, provides for the provisional attachment of the aforesaid Savings Bank Account, we are left with no other option to hold that even for the attachment of the said Savings Bank Account as well, the period of one year has also lapsed. We hereby declare that the provisional attachment ordered on 3rd June, 2024, vide the impugned order under Section 83 of the Act, in relation to M/s Aanya Traders bearing Bank A/c No. 135605500936, IFSC Code : ICIC0006295 with the ICICI Bank Ltd., Garg Plaza, 5 Community Centre, Sector-8, Rohini, Delhi – 110085 and Savings Bank Account No. 072401004328; IFSC Code: ICIC0000724 in relation to the petitioner, is non-operational under the provisions of Section 83(2) of the Act. We deem it appropriate to partly allow the petition in view of the above terms. Accordingly, the petition along with pending applications, if any, stands disposed of. Issues: (i) Whether the provisional attachment of Bank Account No. 135605500936 (impugned order dated 03.06.2024) ceased to operate after one year under Section 83(2) of the Central Goods and Services Tax Act, 2017; (ii) Whether Savings Bank Account No. 072401004328 was validly provisionally attached under Section 83 and, if so, whether that attachment remains operative.Issue (i): Whether the provisional attachment of Bank Account No. 135605500936 ceased to operate after the statutory period of one year under Section 83(2) of the Act.Analysis: Section 83(1) empowers provisional attachment; Section 83(2) provides that a provisional attachment is valid for one year from the date of the order and ceases to operate thereafter if appropriate recovery action is not effected within that period. The impugned provisional attachment was dated 03.06.2024; the one-year period expired on 02.06.2025, after which the statutory cessation under Section 83(2) applies. Records show the attachment period has lapsed and the bank and respondent did not act to maintain the attachment beyond the statutory period.Conclusion: The provisional attachment of Bank Account No. 135605500936 ceased to operate after 02.06.2025 and the conclusion is in favour of the assessee.Issue (ii): Whether Savings Bank Account No. 072401004328 was validly provisionally attached under Section 83 and whether any such attachment remains operative.Analysis: The record does not disclose justifiable material or a distinct order specifically attaching Savings Bank Account No. 072401004328 under Section 83. Even if the Form under the Act contemplates provisional attachment of that account due to common PAN linkage, the statutory one-year period applicable to provisional attachments has also elapsed in respect of attachments arising from the 03.06.2024 order.Conclusion: There is no valid, operative provisional attachment of Savings Bank Account No. 072401004328; the conclusion is in favour of the assessee.Final Conclusion: The petition is partly allowed by declaring that the provisional attachments referenced in the impugned order dated 03.06.2024 are non-operational by virtue of Section 83(2) of the Act, and the petition along with pending applications is disposed of.Ratio Decidendi: A provisional attachment under Section 83 of the Central Goods and Services Tax Act, 2017 ceases to operate after the statutory period of one year from the date of the attachment order under Section 83(2) if appropriate recovery action is not effected within that period.