Facts of the Case

  • The Petitioner filed a writ petition challenging a communication dated 31 December 2020, through which the Respondents directed banks to freeze/provisionally attach the bank accounts of the Petitioner company.
  • The Petitioner sought directions for release and de-freezing of its bank accounts.
  • The attachment was made under Section 83(1) of the CGST Act, 2017.

Issues Involved

  1. Whether provisional attachment of bank accounts under Section 83 of the CGST Act continues beyond one year.
  2. Whether the Respondents were justified in continuing the attachment without issuing a fresh order.

Petitioner’s Arguments

  • The Petitioner contended that as per Section 83(2) of the CGST Act, every provisional attachment ceases to have effect after one year from the date of the order.
  • Since the statutory period had expired, the continuation of attachment was illegal and without authority of law.

Respondent’s Arguments

  • The Respondents submitted that no fresh attachment order had been passed against the Petitioner as on date.

Court’s Findings / Order

  • The Court observed that provisional attachment automatically ceases after one year from the date of the order under Section 83(1).
  • It was held that the impugned attachment no longer had legal effect after expiry of one year.
  • The writ petition was allowed.
  • The Respondents were directed to de-freeze the Petitioner’s bank accounts within three working days.

Important Clarification by Court

  • Provisional attachment under GST law is time-bound and self-expiring.
  • Authorities cannot continue attachment beyond one year without issuing a fresh valid order.

Link to download the order -  https://delhihighcourt.nic.in/app/case_number_pdf/2022:DHC:378-DB/MMH31012022CW1672021_221617.pdf

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