Om Prakash Gupta Vs Pr. Additional Director General DGGI & Ors. (Delhi High Court)
Delhi High Court has ordered the lifting of the provisional attachment of Om Prakash Gupta’s bank account, concluding that such an attachment under Section 83 of the Central Goods and Services Tax (CGST) Act, 2017, ceases to have effect once the show cause notice (SCN) proceedings are finalized and appellate remedies are pursued.
Read SC Judgment in this case: Bank Attachment Ends After Final GST Order Under Section 74: SC
The case originated from a writ petition filed by Om Prakash Gupta challenging a bank account attachment letter dated May 28, 2024, issued under Section 83 of the CGST Act, and an SCN dated June 20, 2024. Gupta contested the SCN, arguing that the mandatory prior intimation in Form DRC-01A was not provided within the stipulated timeframe, being issued only one day before the SCN. Regarding the attachment, Gupta argued it was issued before any proceedings were initiated against him and without the Commissioner’s necessary opinion on the need to protect government revenue, citing Section 83 of the CGST Act and Circular No. CBEC-20/16/05/2021-GST/359 dated February 23, 2021.
When the petition was first heard on August 8, 2024, the High Court referenced the Supreme Court’s decision in M/s Radha Krishan Industries v. State of Himachal Pradesh & Ors. This precedent underscored that provisional attachment orders under Section 83(1) are draconian and must strictly adhere to statutory conditions. Specifically, it highlighted that the Commissioner must form an opinion based on tangible material that provisional attachment is “necessary so to do” for protecting government revenue, implying that revenue protection cannot be achieved otherwise. The Supreme Court had also stated that an appeal against a provisional attachment order under Section 83(1) is not available under Section 107(1) of the CGST Act, but a writ petition under Article 226 of the Constitution is maintainable. Furthermore, the Radha Krishan Industries judgment emphasized that once a final order is passed under Section 74(9) of the CGST Act, the provisional attachment must end. It also stipulated that under Rule 159(5), the affected person has the right to submit objections and be heard, with the Commissioner obliged to issue a reasoned order on such objections.
