Additional Director General Vs Ali K. (Kerala High Court)
Kerala High Court, in the case of Additional Director General vs. Ali K., ruled that a provisional attachment order under Section 83 of the Central Goods and Services Tax (CGST) Act, 2017, cannot extend beyond one year. Furthermore, a fresh attachment order on the same facts is not permitted. The Revenue, challenging a single judge’s ruling, argued that nothing in the CGST Act prevents authorities from issuing a new attachment after the initial one expires. The High Court, however, upheld the strict interpretation of Section 83, emphasizing that Parliament intended attachment orders to be valid only for a year. The court rejected the Revenue’s argument, stating that reissuing an attachment would amount to reading words into the statute, which is impermissible in tax law.
The judgment also referred to legal principles such as eminent domain and property rights under Article 300A of the Indian Constitution, emphasizing that state authorities must follow due process when dealing with citizens’ property. The court distinguished its view from a Gujarat High Court ruling in a similar case, stating that automatic renewal of attachments would be an overreach of statutory power. Additionally, the court cited a Supreme Court decision in Radha Krishna Industries v. State of Himachal Pradesh, reinforcing that an attachment order ceases to have effect after one year. Concluding that sufficient safeguards exist to protect Revenue without extending attachment orders, the Kerala High Court dismissed the appeal, affirming that fresh orders cannot be issued on the same grounds.
