Facts of the Case

The petitioner 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 petitioner contended that the attachment continued beyond the legally permissible period of one year and therefore had lost its validity. 

Issues Involved

  1. Whether a provisional attachment under Section 83 of the CGST Act can continue beyond one year?
  2. Whether the bank account of the petitioner could legally remain attached without issuance of a fresh attachment order?

Petitioner’s Arguments

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

Respondent’s Arguments

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

Court Findings / Order

The Hon’ble Delhi High Court held:

  • As per Section 83(2) of the CGST Act, a provisional attachment ceases to have effect after one year.
  • Since no fresh attachment order was issued, the earlier attachment order had automatically lapsed.

Final Directions

  • The provisional attachment of the petitioner’s bank account was declared non-operative.
  • The concerned bank was directed to:
    • Immediately allow operation of the bank account.
    • Remove all restrictions imposed solely on the basis of the expired attachment order.

Important Clarification by Court

  • Provisional attachment under Section 83 is time-bound and self-limiting.
  • Authorities cannot extend attachment indefinitely without issuing a fresh order.
  • Any continuation beyond one year without fresh action is illegal and unenforceable.

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/SAS24052024CW73872024_162251.pdf 

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