GST Provisional Attachment Ends After One Year, Assessee Allowed Bank Access: Rajasthan HC

Sunshine Exim Vs Directorate General of GST Intelligence Jaipur Zonal Unit (Rajasthan High Court)

Rajasthan High Court addressed the issue of provisional attachment of a bank account under Section 83 of the Central Goods and Services Tax Act, 2017, in the case of Sunshine Exim Vs Directorate General of GST Intelligence, Jaipur Zonal Unit. The petitioner challenged the continued restraint on their bank account despite the statutory one-year period for attachment having lapsed. The attachment order in question was issued on June 26, 2023. The petitioner contended that, by operation of law, the attachment automatically ceases after one year, yet the respondent bank was not permitting access to the account.

The respondent representing the GST authorities acknowledged that the law under Section 83 of the GST Act limits the provisional attachment period to a maximum of one year. The court affirmed that such attachment automatically lapses once the period ends and no additional order is required to formalize its cessation. Consequently, the court directed the respondent bank, Punjab National Bank, to allow the petitioner to operate its account unless there were other proceedings unrelated to the expired attachment order.

In its decision, the Rajasthan High Court underscored the automatic expiration of provisional attachments after the stipulated period under the GST Act. This ruling provides clarity on the procedural limits of Section 83, ensuring businesses are not unduly restrained after the attachment period ends. The petition was disposed of with specific instructions to facilitate account access, reflecting the court’s intent to uphold statutory timelines and protect taxpayers’ rights.

FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT

1. Heard.

2. Learned counsel for the petitioner would submit that even though the maximum period of attachment as provided under Section 83 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as ‘the Act of 2017’) has come to an end, attachment order having been issued on 26.06.2023, the petitioner is not being permitted to operate its bank account by the respondent-bank.

3. Learned counsel for Respondent No. 1, on advance copy, would submit that legal position is clear that maximum period of attachment would be one year as provided under Section 83 of the Act of 2017. He submits that the attachment comes to an end automatically by operation of law and no order is required to be passed.

4. In view of the submissions which have been made and the provisions contained in Section 83 of the Act of 2017, we are not inclined to keep this matter pending but to dispose off this writ petition with direction to Respondents No. 2 and 3-Punjab National Bank to allow the petitioner to operate its bank account unless the attachment of the account is in respect of some proceedings other than the one in connection with which order of attachment was earlier passed on 26.06.2023.

5. Writ petition is, accordingly, disposed off.