Facts of the Case

The petitioner, Konica Singhal, challenged a provisional attachment order issued under Section 83 of the CGST Act. The order dated 27.01.2022 resulted in the attachment of her bank account maintained with AU Small Finance Bank.

The petitioner contended that despite the lapse of more than one year from the date of the attachment order, the bank account continued to remain under restriction without issuance of any fresh attachment order.

Issues Involved

  1. Whether a provisional attachment under Section 83 of the CGST Act continues beyond one year without renewal.
  2. Whether the bank account of the petitioner could legally remain frozen after expiry of the statutory period.

Petitioner’s Arguments

  • The petitioner argued that as per Section 83(2) of the CGST Act, a provisional attachment ceases automatically after one year.
  • The attachment order dated 27.01.2022 had expired by operation of law.
  • Continued restriction on the bank account without fresh order was illegal and arbitrary.

Respondent’s Arguments

  • The respondent conceded that the provisional attachment order was issued on 27.01.2022.
  • It was admitted that no fresh attachment order had been passed thereafter.

Court’s Findings / Order

  • The Hon’ble Court held that:
    • As per Section 83(2), provisional attachment automatically ceases after one year.
    • Since no fresh order was issued, the attachment lost its legal effect.
  • The Court allowed the petition and directed:
    • Immediate de-freezing of the petitioner’s bank account.
    • The bank shall permit full operation without any embargo based on the expired attachment order. 

Important Clarification

  • Automatic Lapse Principle: Provisional attachment under Section 83 does not require a formal revocation—it expires automatically after one year.
  • No Implied Extension: Authorities cannot continue attachment without issuing a fresh order.
  • Bank Compliance: Banks cannot continue restrictions solely based on an expired attachment order.

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/SAS24052024CW74702024_163745.pdf

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