Facts of the Case

  • The attachment was made under powers conferred by Section 83 of the CGST Act.
  • No fresh attachment orders or DRC-22 notices were issued thereafter.
  • The petitioners approached the High Court seeking de-freezing of their accounts.

Issues Involved

  1. Whether provisional attachment of bank accounts under Section 83 can continue beyond one year?
  2. Whether the absence of fresh attachment orders renders the earlier attachment invalid?
  3. Whether the petitioners are entitled to immediate de-freezing of their bank accounts?

Petitioner’s Arguments

  • The provisional attachment orders had ceased to be effective after one year as per Section 83(2) CGST Act.
  • No fresh attachment or extension was issued by the department.
  • Continued freezing of accounts was illegal and without authority of law.

Respondent’s Arguments

  • The department submitted that no fresh DRC-22 notices had been issued.
  • It was clarified that proceedings under Section 74 of the Delhi GST Act had been initiated separately.

Court Findings / Judgment

The Delhi High Court held:

  • As per Section 83(2) CGST Act, a provisional attachment automatically ceases after one year from the date of the order.
  • Since no fresh attachment order had been issued, the earlier attachment was no longer valid or effective.
  • The continued freezing of bank accounts was therefore unsustainable in law.

Court Order

The Court directed:

  • The Respondents shall de-freeze the bank accounts of the Petitioners within three days.
  • The writ petitions were disposed of accordingly.

Important Clarification

  • Provisional attachment under Section 83 is not indefinite.
  • It has a strict statutory limitation of one year, after which it lapses automatically.
  • Authorities must issue a fresh order if they intend to continue attachment.

Link to download the order -  https://delhihighcourt.nic.in/app/case_number_pdf/2022:DHC:881-DB/MMH08032022CW36972022_184753.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.