Sultan Mahmood Khan Vs Commercial Tax Officer (Karnataka High Court)
The petitioner challenged the Provisional Attachment Order dated 02.05.2024 issued under Section 83 of the Central Goods and Services Tax Act, 2017 and the Karnataka Goods and Services Tax Act, 2017. The grievance raised by the petitioner was that the provisional attachment order continued to subsist beyond the one-year period contemplated under Section 83 of the Act. In support of the challenge, reliance was placed on the Supreme Court’s judgment in Kesari Nandan Mobile v. Office of the Assistant Commissioner of State Tax (Enforcement Division–5).
After hearing counsel for the petitioner and the learned Additional Government Advocate for the respondents, the Karnataka High Court observed that, in light of the Supreme Court’s decision in Kesari Nandan Mobile, two propositions were beyond dispute. First, a provisional attachment order under Section 83 lapses after the statutory period of one year, and persons affected should not be compelled to approach High Courts for lifting such an order. Second, after the provisional attachment order lapses on expiry of one year, another attachment order cannot be issued.
The High Court referred to paragraphs 30 and 36 of the Supreme Court’s judgment. Paragraph 30 states that, considering the draconian nature of the power conferred under Section 83(1) of the CGST Act, the provision must be construed so that Section 83(2) is not rendered ineffective. It records that permitting the Revenue to issue a fresh provisional attachment order after the original order has lapsed by operation of law, or to renew the same, would render Section 83(2) otiose and would confer a power not intended by the statute. The Supreme Court further held that there was no reason to interpret Section 83 as conferring any additional power beyond that expressly provided in Section 83(1), and that the attachment must lapse as provided under Section 83(2).
