Facts of the Case

The petitioner, Aashna Singhal, challenged a provisional attachment order issued under Section 83 of the CGST Act, 2017, whereby her bank account maintained with Yes Bank Ltd. was attached on 27.01.2022.

The petitioner contended that the attachment continued beyond the statutory period prescribed under the Act, despite no fresh order being issued by the authorities.

Issues Involved

  1. Whether a provisional attachment under Section 83 of the CGST Act continues beyond one year without renewal.
  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 dated 27.01.2022 automatically ceased after one year in terms of Section 83(2) of the CGST Act.
  • No fresh attachment order had been issued thereafter.
  • Continued restriction on the bank account 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 passed after expiry of one year. 

Court’s Findings / Order

  • The Court held that under Section 83(2), a provisional attachment ceases to have effect after one year from the date of the order.
  • Since no fresh order was issued, the attachment automatically lapsed.
  • The petition was allowed.
  • The respondent bank was directed to immediately permit operation of the petitioner’s bank account and remove all restrictions based solely on the expired attachment order.

Important Clarification

  • Provisional attachment under Section 83 is time-bound and cannot continue indefinitely.
  • Authorities must issue a fresh attachment order if they intend to continue such restriction beyond one year.
  • Any continuation without renewal is legally unsustainable.

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/SAS24052024CW74642024_163232.pdf

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