In W.P.(C) 257/2023-DEL HC- As per Sec.83(2) of CGST Act, provisional attachment would cease to have any effect after expiry of period of one year from date of said order: Delhi HC holds provisional attachment order to be inoperative
Justices Vibhu  Bakhru & Amit Mahajan [13-02-2023]

Read Order: M/S VKS INDUSTRIES Vs. COMMISSIONER, CENTRAL EXCISE ANDCGST 

LE Correspondent

New Delhi, March 14, 2023:  In terms of Sub-section (2) of Section 83 of the CGST Act, the provisional attachment would cease to have any effect after the expiry of the period of one year from the date of the said order, the Delhi High Court has observed.

The petitioner had filed the petition before the Division Bench of Justice Vibhu  Bakhru and Justice Amit Mahajan issued a writ of Mandamus or any other appropriate writ directing the Respondent to set aside his Order and defreeze the Petitioner’s Axis Bank Account at the earliest.

The petitioner was aggrieved by the action of the respondent attaching its Bank Account on a provisional basis by an order. Section 83 of the Central Goods and Services Tax Act, 2017 (CGST Act) enables provisional attachment of assets, including bank accounts.

It was also not disputed that the provisional attachment order was passed in exercise of powers under Section 83 of the CGST Act. 

“In terms of Sub-section (2) of Section 83 of the CGST Act, the provisional attachment would cease to have any effect after the expiry of the period of one year from the date of the said order”,the Bench said that in terms of Section 83(2) of the CGST Act, the provisional attachment order ceased to be operative after February 6, 2021.

On a pointed query, whether the counter affidavit discloses any order other than attaching the Bank Account in question or extending the attachment, the counsel fairly stated that no further orders have been passed.

The Bench was unable to accept that the provisional attachment can be extended. 

After the provisional order was passed, a show cause notice was issued to the petitioner and the said show cause notice had not been adjudicated till date. 

Since the petitioner’s relief was limited to the de-freezing of its Bank Account, the Bench refrained from examining whether the proceedings in relation to the said show cause notice could now continue.

Allowing the petition, the Bench opined that the order was no longer operative.