Facts of the Case

The petitioners, Ali Asgar Junagadhwala and Kutbuddin Junagadhwala, had their immovable property and bank accounts provisionally attached by order dated 05.01.2021 issued by the Commissioner, Central Tax, Secunderabad GST Commissionerate, under Section 83 of the CGST Act, 2017. After the statutory one-year life of the order expired on 05.01.2022, the petitioners approached the concerned bank authorities and the Sub-Registrar, Bowenpally. While HDFC and Kotak Mahindra Bank permitted the petitioners to operate their accounts, ICICI Bank (respondent no.5) and the Sub-Registrar (respondent no.4) did not accede despite a written request dated 18.08.2023, leading to the present writ petition seeking a declaration that the attachment had ceased to be in force under Section 83(2) of the Act.

Issues Involved

  1. Whether the provisional attachment order dated 05.01.2021, issued under Section 83 of the CGST Act, 2017, continued to have effect beyond one year from its date in the absence of any extension or fresh order.

Petitioner's Arguments

  • Under Section 83(2) of the CGST Act, a provisional attachment order has a life of only one year unless extended, and since the order dated 05.01.2021 was never extended, it ceased to have effect from 05.01.2022.
  • Despite this, ICICI Bank and the Sub-Registrar, Bowenpally continued to restrict the petitioners' dealings with the attached bank account and immovable property even after the statutory period lapsed.

Respondent's Arguments

  • On the Court's direction to verify the position, learned counsel for the Department confirmed on instructions that the provisional attachment order had neither been further extended nor had any fresh attachment order been passed.

Court Order / Findings

  • Section 83(2) of the CGST Act clearly provides that a provisional attachment order shall cease to have effect after the expiry of one year from the date of the order.
  • Since the Department itself confirmed there was no extension or fresh order, the Court held that the provisional attachment order dated 05.01.2021 had, by efflux of time, lost its efficacy with effect from 05.01.2022 and ceased to be in operation.
  • The writ petition was disposed of holding the attachment order to have lapsed, with respondents 4 and 5 (the Sub-Registrar and ICICI Bank) expected to take appropriate decisions in light of this finding.
  • No order as to costs was made.

Important Clarification

A provisional attachment order under Section 83 of the CGST Act automatically expires one year after it is passed unless a fresh order or extension is issued within that period — banks, sub-registrars and other third parties are not entitled to continue giving effect to it merely because no formal de-attachment communication has been received; the statutory time-limit operates of its own force.

Sections Involved

  • Section 83, CGST Act, 2017 – empowers provisional attachment of property, including bank accounts, to protect revenue during pendency of certain proceedings, with sub-section (2) capping its life at one year from the date of the order.

Decision – In Favour of

In favour of the Assessee — the provisional attachment was held to have lapsed by efflux of time, and the petitioners were entitled to have their bank account and property released.

Case Details

High Court for the State of Telangana at Hyderabad; Writ Petition No.24036 of 2023; Coram: Hon'ble Sri Justice P. Sam Koshy and Hon'ble Sri Justice Laxmi Narayana Alishetty; Order dated 05.09.2023; CNR not indicated on the order copy.

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