FACTS OF THE CASE

GMG Tradelink Pvt. Ltd. challenged the provisional attachment of its bank accounts maintained with ICICI Bank, Bhiwani Mandi Branch, effected by the Principal Additional Director General of the Directorate General of GST Intelligence (DGGI) by an order dated 6th March, 2025. The Petitioner contended that the authority executing the provisional attachment lacked jurisdiction under Section 83 of the CGST Act, 2017, as no power was vested in the concerned officer to attach accounts provisionally. The Petitioner also filed objections before the Commissioner pursuant to Rule 159(5) of the CGST Rules, 2017. 

ISSUES INVOLVED

  1. Whether the Principal Additional Director General of the DGGI is competent to exercise powers under Section 83 of the CGST Act, 2017 for provisional attachment of bank accounts.
  2. Whether the provisional attachment was legally sustainable in view of the statutory scheme.
  3. Whether appropriate statutory safeguards and objections were properly considered. 

PETITIONER’S ARGUMENTS

  • The Petitioner argued that Section 83 of the CGST Act authorises only the Commissioner to provisionally attach property in order to protect government revenue and that the Principal Additional Director General had no such delegated authority.
  • The Petitioner contended that the order of provisional attachment, dated 6th March 2025, was therefore unconstitutional and without jurisdiction.
  • Additionally, the Petitioner maintained incomplete communication of reasons and denied an equitable opportunity to respond before attachment. 

RESPONDENT’S ARGUMENTS

  • The Respondents produced Notification No. 14/2017 dated 1st July 2017 issued by the Ministry of Finance, Department of Revenue, Central Board of Excise and Customs, stating that the Principal Additional Director General, DGGI, is equivalent to a Principal Commissioner of GST.
  • On this basis, the Respondents contended that the officer was empowered to act under Section 83 of the CGST Act, 2017 and exercise provisional attachment.
  • The Respondents submitted that the statutory scheme enables provisional attachment to safeguard revenue where proceedings are initiated under relevant Chapters of the CGST Act. 

COURT ORDER / FINDINGS

After hearing counsel for both sides and on perusal of the statutory provisions and Notification, the High Court held:

  • The notification dated 1st July, 2017 makes the Principal Additional Director General of DGGI equivalent to a Principal Commissioner of GST, thereby empowering the authority to exercise powers under Section 83 of the CGST Act.
  • Consequently, the provisional attachment of the Petitioner’s bank accounts was not unsustainable on grounds of authority.
  • However, the Court allowed the Petitioner to submit fresh objections against the provisional attachment, which the respondents shall communicate with reasons within two weeks.
  • Upon such communication, all legal remedies available to the Petitioner shall remain open.
  • The Petition was disposed of with these directions.

IMPORTANT CLARIFICATIONS

  • Section 83 CGST Act, 2017 empowers the Commissioner to provisionally attach property to safeguard government revenue where proceedings under specified Chapters of the Act have commenced.
  • Equivalent Authority: The Notification dated 1st July, 2017 legally places the Principal Additional Director General of GST Intelligence on par with a Principal GST Commissioner for purposes of Section 83, validating his actions unless shown otherwise.
  • The Court did not quash the attachment but clarified procedural safeguards by requiring communication of reasons for objections.

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/PMS27102025CW162592025_164115.pdf 

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