Facts of the Case

The petitioner, Aashna Singhal, challenged a provisional attachment order issued under Section 83 of the CGST Act, whereby her bank account maintained with AU Small Finance Bank was attached on 27.01.2022.

The grievance of the petitioner was that despite the statutory limitation prescribed under Section 83(2), the attachment continued beyond one year without issuance of any fresh attachment order.

Issues Involved

  1. Whether a provisional attachment order under Section 83 of the CGST Act remains valid beyond one year.
  2. Whether the respondent authorities can continue attachment without issuing a fresh order after expiry of the statutory period.

Petitioner’s Arguments

  • The petitioner contended that under Section 83(2) of the CGST Act, any provisional attachment automatically ceases to have effect after one year from the date of the order.
  • Since the attachment order was issued on 27.01.2022 and no fresh order was passed thereafter, the continuation of the attachment was illegal and without authority of law.

Respondent’s Arguments

  • The respondent fairly conceded that the provisional attachment order was issued on 27.01.2022.
  • It was also admitted that no fresh attachment order had been issued after the expiry of one year. 

Court’s Findings / Order

  • The Court held that in terms of Section 83(2) of the CGST Act, a provisional attachment ceases automatically after one year.
  • Since no fresh attachment order was issued, the impugned attachment could not survive beyond the statutory period.
  • The writ petition was allowed.
  • The Court directed the respondent bank to immediately permit operation of the petitioner’s bank account and remove all restrictions imposed solely on the basis of the expired attachment order. 

Important Clarification

  • The judgment reiterates that provisional attachment under GST law is time-bound and self-terminating.
  • Authorities cannot continue attachment beyond one year without issuing a fresh order in compliance with law.
  • Banks must not enforce attachment orders that have legally expired.

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/SAS24052024CW74382024_174013.pdf  

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.