Veerapandi Vs Union of India (Madras High Court)
The Madras High Court allowed a writ petition challenging proceedings dated 21.02.2025 issued under Section 83 of the Central Goods and Services Tax Act, 2017, which resulted in the freezing of the petitioner’s savings bank account maintained with Tamil Nadu Mercantile Bank, Paramakudi Branch. The petitioner sought quashing of the impugned proceedings and a direction to the concerned respondents to defreeze the account and permit its operation.
The petitioner submitted that he was engaged in agricultural activities and that his wife operated a registered footwear business under the name “Singapore Shoe Mart”. He stated that the bank account was maintained from his lawful earnings for meeting his family’s day-to-day and educational expenses. According to the petitioner, the bank informed him on 21.02.2025 that the account had been frozen pursuant to proceedings issued by the first respondent under Section 83 of the CGST Act.
Relying on Section 83(2) of the CGST Act, 2017, the petitioner submitted that provisional attachment of a bank account remains valid only for one year, after which the attachment automatically ceases to have effect. He also relied upon an order of the Delhi High Court dated 12.09.2025 in W.P.(C) No.10398 of 2024 and C.M. Application No.42732 of 2024. The Central Government Standing Counsel appearing for the first respondent fairly submitted that the factual aspects stated by the petitioner were not disputed.
The Madras High Court, after considering the materials on record, held that in view of the statutory limitation prescribed under Section 83(2), provisional attachment of the petitioner’s bank account could not continue beyond the period prescribed under the Act.
Accordingly, the Court set aside the proceedings issued by the first respondent attaching the bank account. The petitioner was permitted to operate the account maintained with the third respondent Bank. The concerned Bank Manager was directed to give effect to the order and permit operation of the account without insisting upon any further communication from the Directorate General of GST Intelligence (DGGI).
The writ petition was allowed with no order as to costs, and the connected miscellaneous petitions were closed.
Cases Discussed
- W.P.(C) No.10398 of 2024 and C.M. Application No.42732 of 2024 (Delhi High Court), order dated 12.09.2025
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This Writ Petition has been filed challenging the impugned notice dated 21.02.2025 issued by the first respondent and consequently seeking a direction to respondents 2 and 3 to defreeze the petitioner’s bank account maintained with the third respondent, namely, Tamil Nadu Mercantile Bank, Paramakudi Branch, Ramanathapuram District, and permit the petitioner to operate the said bank account, based on the petitioner’s representation dated 30.06.2026, within a time frame to be stipulated by this Court.
2. By consent of the learned counsel appearing on either side, the Writ Petition is taken up for final disposal at the stage of admission itself.
3. Since no adverse order is proposed to be passed against the respondents 2 and 3, notice to the respondents 2 and 3 is dispensed with.
4. The learned counsel appearing for the petitioner submitted that the petitioner is running a footwear shop under the name and style of “Singapore Shoe Mart” situated on the Madurai—Ramanathapuram Road, Paramakudi Town. The said business is registered and operated in the name of the petitioner’s wife. Apart from the said business, the petitioner is also engaged in agricultural activities by cultivating his agricultural lands, which are the only sources of income for the petitioner’s family.
5. It is further submitted that, out of his lawful earnings, the petitioner opened and maintained a Savings Bank Account with the third respondent Bank for meeting the day-to-day expenses of his family and for the educational expenses of his children.
6. The learned counsel for the petitioner further submitted that, on 21.02.2025, the third respondent Bank informed the petitioner that his Savings Bank Account had been frozen pursuant to the proceedings issued by the first respondent dated 21.02.2025 under Section 83 of the Central Goods and Service Tax Act, 2017.
7. The learned counsel for the petitioner submitted that, as per Section 83(2) of the Central Goods and Service Tax Act, 2017, an order of provisional attachment of a bank account remains valid only for a period of one year. After the expiry of the said period, the attachment automatically ceases to have effect. He further submitted that the said issue has already been considered by the Hon’ble Delhi High Court in W.P.(C) No.10398 of 2024 and C.M. Application No.42732 of 2024, by order dated 12.09.2025. Hence, he prayed for allowing the Writ Petition.
8. The learned Central Government Standing Counsel appearing for the first respondent fairly submitted that the factual aspects stated by the learned counsel for the petitioner are not disputed.
9. Heard the learned counsel appearing for the petitioner and the learned Central Government Standing Counsel appearing for the first respondent and perused the materials available on record.
10. Considering the facts and circumstances of the case and in view of the statutory limitation prescribed under Section 83(2) of the Central Goods and Service Tax Act, 2017, the provisional attachment of the petitioner’s bank account cannot be continued beyond the period prescribed under the Act.
11. Accordingly, the impugned proceedings issued by the first respondent attaching the petitioner’s bank account are set aside. The petitioner is at liberty to operate the bank account maintained with the third respondent Bank. The concerned Manager of the third respondent Bank is directed to give effect to this order and permit the petitioner to operate the bank account without insisting upon any further communication from the Directorate General of GST Intelligence (DGGI).
12. With the above directions, the Writ Petition stands allowed. There shall be no order as to costs. Consequently, connected Miscellaneous Petitions are closed.
