Case Law Details
Sultan Mahmood Khan Vs Commercial Tax Officer (Karnataka High Court)
The petitioner challenged the Provisional Attachment Order dated 02.05.2024 issued under Section 83 of the Central Goods and Services Tax Act, 2017 and the Karnataka Goods and Services Tax Act, 2017. The grievance raised by the petitioner was that the provisional attachment order continued to subsist beyond the one-year period contemplated under Section 83 of the Act. In support of the challenge, reliance was placed on the Supreme Court’s judgment in Kesari Nandan Mobile v. Office of the Assistant Commissioner of State Tax (Enforcement Division–5).
After hearing counsel for the petitioner and the learned Additional Government Advocate for the respondents, the Karnataka High Court observed that, in light of the Supreme Court’s decision in Kesari Nandan Mobile, two propositions were beyond dispute. First, a provisional attachment order under Section 83 lapses after the statutory period of one year, and persons affected should not be compelled to approach High Courts for lifting such an order. Second, after the provisional attachment order lapses on expiry of one year, another attachment order cannot be issued.
The High Court referred to paragraphs 30 and 36 of the Supreme Court’s judgment. Paragraph 30 states that, considering the draconian nature of the power conferred under Section 83(1) of the CGST Act, the provision must be construed so that Section 83(2) is not rendered ineffective. It records that permitting the Revenue to issue a fresh provisional attachment order after the original order has lapsed by operation of law, or to renew the same, would render Section 83(2) otiose and would confer a power not intended by the statute. The Supreme Court further held that there was no reason to interpret Section 83 as conferring any additional power beyond that expressly provided in Section 83(1), and that the attachment must lapse as provided under Section 83(2).
The High Court also referred to paragraph 36 of the Supreme Court’s judgment, wherein it was observed that it would be incongruous and redundant for parties to approach High Courts to seek enforcement of a law already in force. The Supreme Court further observed that deliberate non-compliance by the Revenue with statutory protection would undermine the rule of law and render such action vulnerable to being set aside.
In view of these observations, the Karnataka High Court held that the petitioner was entitled to succeed in challenging the provisional attachment order dated 02.05.2024. The Court observed that the petitioner would be entitled to operate its account unless there were other proceedings. Accordingly, the writ petition was allowed.
Cases Discussed:
- Kesari Nandan Mobile v. Office of the Assistant Commissioner of State Tax (Enforcement Division–5), 2025 SCC OnLine SC 2075.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioner has called in question the Provisional Attachment Order dated 02.05.2024 [Annexure-B] under Section 83 of the Central Goods and Services Tax Act/Karnataka Goods and Services Tax Act, 2017 [for short, ‘the Act’]. The petitioner’s grievance is with the order subsisting beyond the one year contemplated under Section 83 of the Act. The reliance is upon the Apex Court’s Judgment in ‘Kesari Nandan Mobile v. Office of the Assistant Commissioner of State Tax [2] Enforcement Division – 5’1.
Sri Shreehari Kutsa, the learned counsel for the petitioner, and Sri K Hemakumar, a learned Additional Government Advocate, who accepts notice for the respondents, are heard for disposal of the petition. This Court must observe that with the Apex Court’s decision in the case of Kesari Nandan Mobile [supra] two propositions are beyond dispute. The first proposition is that the Provisional Attachment Order will have to lapse after the statutory period of one year and that the concerned must not be compelled to approach High Courts for lifting of the Provisional Order. The second proposition is that after the lapse of the Provisional Attachment Order with the lapse of one year, there cannot be another attachment order.
This Court must refer to paragraphs 30 and 36 of the Apex Court’s Judgment, which read as under:
“30. That apart, having regard to the draconian nature of power conferred on the Revenue by sub-section (1) of section 83 of the CGST Act to levy a provisional attachment, the terms of the entire section have to be construed in a manner so that sub-section (2) of section 83 is not effectively reduced to a dead letter. We are reminded of the maxim ut res magis valeat quam pereat. It is an interpretive doctrine that a legal text, specially a statute, should be interpreted in a way that gives the document force rather than makes it fail. Conceding power to the Revenue to issue a fresh provisional order of attachment after the initial order has lapsed by operation of law or to renew the same would render the text of sub-section (2) of section 83 otiose and accepting the reason assigned by the Gujarat High Court would permit the Revenue to exercise a power which is not the statutory intendment. We, therefore, see no reason to read section 83 in a manner to confer any additional power over and above the draconian power conferred by sub-section (1) and upon lapse as ordained by sub-section (2).
36. It would seem rather incongruous and redundant that parties must approach the High Courts to seek enforcement of a law already in force. The deliberate non-compliance by the Revenue to implement statutory protection would undermine the rule of law and render the action not only susceptible to vulnerability but also being set at naught.”
In the light of the afore, the petitioner must succeed in the challenge against the Order dated 02.05.2024 and with the observation that the petitioner will be entitled to operate its account unless there are other proceedings.
The petition is allowed accordingly.
Note:
1 2025 SCC OnLine SC 2075
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