Yash Metal Impex Pvt. Ltd. & Anr. Vs Principal Commissioner of Central GST (Bombay High Court)
The Bombay High Court has declared a provisional attachment of a company’s bank accounts to be legally invalid, ruling that the one-year statutory period for such attachments had long expired. In a direct and concise judgment in the case of Yash Metal Impex Pvt. Ltd. & Anr. vs. Principal Commissioner of Central GST, the court sided with the petitioner, reinforcing the strict time limits imposed on tax authorities by the Central Goods and Services Tax (CGST) Act, 2017. The decision underscores the principle that such coercive measures cannot be indefinite and must adhere to the letter of the law.
The case originated from a provisional attachment order issued by the GST authorities on February 11, 2019, which froze the bank accounts of the petitioner, Yash Metal Impex Pvt. Ltd. The petitioner approached the High Court with two key contentions: first, that no ongoing proceedings justified the attachment, and second, that even if a valid order had been passed, it would have ceased to have effect after one year as per Section 83(2) of the CGST Act.
The Revenue, represented by the Principal Commissioner of Central GST, countered these arguments. The department’s counsel submitted that proceedings were indeed pending, stemming from a search conducted on a related entity, M/s. Dixit Enterprises. The department also pointed out that the petitioner had given an undertaking on March 13, 2020, to not use the attached funds, implying that the attachment was still validly in effect.
