Provisional Attachment Order Under GST Act Expires After One Year: Delhi HC
The Delhi High Court has ruled that the lifespan of an order of provisional attachment issued under Section 83 of the Goods and Services Tax (GST) Act is limited to one year.
The Division Bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja made this observation while adjudicating a case concerning the duration of such attachments.
The Court's observation came in response to a petition filed by an assessee challenging a communication issued under Section 83 of the Central Goods and Service Tax Act, 2017. The communication instructed the Branch Manager of HDFC Bank Ltd., Paschim Vihar Branch, to freeze outward fund movements from the petitioner's bank account.
The Counsel for the Petitioner submitted that the validity of an order under Section 83 of the Act is one year, and despite the passage of one year the Bank did not not permit the operation of the said account.
Noting the provisions outlined in Section 83 of the GST Act, which empower the Commissioner to provisionally attach property, including bank accounts, the Court emphasized that such attachments automatically expire after the lapse of one year from the date of issuance under Section 83(1). The Bench highlighted the communication's date as August 14, 2019, and affirmed that a full year had elapsed since its issuance.
Consequently, the Court held that the provisional attachment order dated August 14, 2019, had lost its efficacy and could no longer be enforced by either the tax department or the bank. Therefore, the bank was instructed not to restrain the operation of the Petitioner's account solely based on the expired order.
"In view of Section 83 (2) of the Act, the life of an order of provisional attachment is only one year. In the instant case, the impugned communication is dated 14.08.2019 and a period of one year has elapsed from the issuance of the said communication. Consequently, the impugned order dated 14.08.2019 has ceased to be effective and cannot be any more implemented either by the respondents No.1 and 2 or the HDFC Bank i.e., respondent No.3. Accordingly, it is declared that order dated 14.08.2019 ceases to have effect," the Court said.
"It is, however, clarified that this order would be without prejudice to any other order of provisional attachment issued by either respondents No.1 and 2 or any other authority communicated to the HDFC Bank. In case any such order is communicated to the HDFC Bank, the Bank shall give due credence to the same irrespective of this order," the Bench clarified.
Cause Title: M/S Krish Overseas v. Commissioner Central Tax-Delhi West & Ors.
Appearance:-
Petitioner: Advocates Akhil Krishan Maggu,Vikas Sareen, Ayush Mittal, Maninder Kaur, Oshin Maggu
Respondent: Advocates Ateev Mathur, Anurag Ojha (Senior Standing Counsel), Subham Kumar, Vipul Teotia
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