Facts of the Case

The petitioner, Konica Singhal, challenged a provisional attachment order issued under Section 83 of the CGST Act, whereby her bank account maintained with Yes Bank Ltd. was attached.

The attachment order was originally issued on 27.01.2022. The petitioner contended that as per Section 83(2), such provisional attachment automatically ceases after one year unless renewed.

Despite expiry of the statutory period, no fresh attachment order was issued, yet the restriction on the bank account continued. 

Issues Involved

  1. Whether a provisional attachment under Section 83 of the CGST Act continues beyond one year without a fresh order.
  2. Whether the respondent authorities can restrict operation of a bank account after expiry of the statutory attachment period.

Petitioner’s Arguments

  • The provisional attachment order was issued on 27.01.2022.
  • As per Section 83(2) of the CGST Act, such attachment ceases after one year.
  • No fresh attachment order had been issued by the authorities.
  • Continued restriction on the bank account was illegal and without authority of law.

Respondent’s Arguments

  • The respondent conceded that:
    • The provisional attachment order was indeed issued on 27.01.2022.
    • No subsequent or fresh attachment order had been passed thereafter.

Court’s Findings / Order

  • The Court observed that under Section 83(2), a provisional attachment automatically lapses after one year.
  • Since no fresh order was issued, the attachment ceased to have effect after expiry of the statutory period.
  • The Court allowed the petition and held:
    • The provisional attachment of the petitioner’s bank account is no longer valid.
    • The respondent bank is directed to immediately allow operation of the bank account.
    • No embargo shall be imposed solely on the basis of the expired attachment order.

Important Clarification by the Court

  • Provisional attachment under Section 83 is time-bound and cannot continue indefinitely.
  • Authorities must issue a fresh attachment order if continuation is required.
  • Banks cannot continue freezing accounts based on expired orders.

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/SAS24052024CW74452024_162928.pdf 

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