Case Law Details
Merlin Facilities Pvt. Ltd. Vs Union Of India & Ors. (Delhi High Court)
In an intriguing case of Merlin Facilities Pvt. Ltd. Vs Union of India, the Delhi High Court dealt with the legality of a provisional attachment order under Section 83 of the Central Goods and Service Tax Act, 2017 (CGST Act). The Court was asked to consider the continued enforceability of the attachment order that provisionally attached the petitioner’s bank accounts.
Analysis: The crux of the case lies in the interpretation of Section 83(2) of the CGST Act, which stipulates a maximum operative period of one year for any provisional attachment order. The Delhi High Court concluded that as per the clear wording of this section, any such attachment order loses its force after the completion of a year from its date of issue.
Despite the respondent’s assertion of the petitioner being a non-cooperating non-existing entity, the Court upheld the rule of law as per the provisions of the CGST Act. As no further orders were passed for dues recovery, and the statutory period for the impugned order had lapsed, the Court ruled that the petitioner was free to operate its bank accounts without any impediments arising from the attachment order.
Conclusion: This ruling by the Delhi High Court in the case of Merlin Facilities Pvt. Ltd. Vs Union of India highlights the critical importance of adhering to statutory timelines set out in legislation such as the CGST Act. It reaffirms the protection of taxpayers’ rights against prolonged provisional attachment of their assets.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
The petitioner has filed the present petition, inter alia, impugning an order dated 13.01.2021, passed under Section 83 of the Central Goods and Service Tax Act, 2017 (hereafter ‘the CGST Act’), whereby the following bank accounts of the petitioner were provisionally attached:
|
Bank A/c No. |
Maintained with |
| 046105500880 | ICICI Bank Bahadurgarh Branch Delh Rohtak Road, NH-10, Bahadurgarh, Haryana- 124507 |
| 01111132000386 | Oriental bank of commerce (Now merged with Punjab National Bank) Railway Road, Bahadurgarh, Haryana-124507 |
| 919020024648913 | Axis Bank, GL 005 to 008, Ground Floor, Cross Point, DLF Phase IV, Gurugram, Haryana 122009 |
2. Learned counsel for the respondent submits that the inquiries have revealed that the petitioner is a non-existing person and has not cooperated in the investigation.
3. However, it is not disputed that no further orders have been passed for recovering any dues.
4. Section 83 (2) of the CGST Act reads as under:
“83. Provisional attachment to protect revenue in certain cases
[(1) Where, after the initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue it is necessary so to do, he may, by order in writing, attach provisionally, any property, including bank account, belonging to the taxable person or any person specified in sub-section (1A) of section 122, in such manner as may be prescribed.]
(2) Every such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the order made under sub-section (1).”
5. It is clear from the plain language of Section 83(2) of the CGST Act that the operation of an order provisionally attaching the bank account would cease to be operative after the expiry of the statutory period of one year.
6. In the aforesaid circumstances, the impugned order dated 13.01.2021 has ceased to be operative. Since the impugned order is no longer operative, no orders are required for setting aside the same.
7. In so far as the petitioner’s prayer for permitting the petitioner to operate its bank account is concerned, clearly; the impugned order would not impede the petitioner, in any manner, in operating its bank account. The concerned Bank shall proceed on the basis that the said order dated 13.01.2021 is no longer operative.
8. The petition is disposed of in the aforesaid terms.
