Attachment Order Lapses After One-Year Limit Under GST Law: Delhi HC

Devansh Wire And Cables Private Limited Vs Union of India & Anr. (Delhi High Court)

The petitioner challenged an order dated 18.11.2020 passed under Section 83 of the CGST Act, which had provisionally attached its property and bank account. The Court noted that under Section 83(2) of the CGST Act, any order issued under Section 83(1) ceases to operate after one year, and therefore the impugned attachment order was no longer operative. The petitioner stated that no fresh order of attachment had been issued, while the respondents sought time to verify this. The Court found verification unnecessary because the petitioner’s relief related only to the impugned order, which had already lost effect by operation of law. Accordingly, the Court directed that the concerned bank should not restrict operations of the petitioner’s bank account based on the impugned order, and the Sub-Registrar should not block transfer of the petitioner’s immovable property on the same basis. The petition was disposed of on these terms.

FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT

1. Issue notice.

2. The learned counsels for the respondents accept notice.

3. The petitioner has filed the present petition impugning an order dated 18.11.2020 (hereafter ‘the impugned order’) passed under Section 83 of the Central Goods and Services Tax Act, 2017 (hereafter ‘the CGST Act’) provisionally attaching the petitioner’s property as well as its bank account

4. In terms of Section 83 (2) of the CGST Act, an order passed under Section 83(1) of the CGST Act is not operative after expiry of a period of one year. Thus, the impugned order is no longer operative.

5. The learned counsel for the petitioner submits that no fresh order under Section 83(1) of the CGST Act has been passed. The learned counsel for the respondents seeks time to verify the same.

6. We do not consider the same is necessary as the petitioner’s relief is confined to the impugned order passed under Section 83(1) of the CGST Act. Since the impugned order is not operative by virtue of Section 83(2) of the CGST Act, we consider it apposite to dispose of the present petition by noting the same.

7. The concerned bank (Tamilnad Mercantile Bank Ltd.) shall not interdict the operations of the petitioner’s bank account on the basis of the impugned order. The Sub-registrar shall also not interdict the transfer of the petitioner’s immovable property on the basis of the impugned order.

8. The petition is disposed of in the aforesaid terms.