Introduction: The Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, has issued an advisory regarding the procedure to be followed with respect to sub-section (2) of section 83 of the CGST Act, 2017, when provisional attachment of property ceases to have effect. This advisory provides important insights into the process of releasing provisional property attachments under the CGST Act.
Detailed Analysis:
1. Background on Section 83: Section 83 of the CGST Act, 2017, empowers authorities to issue orders for the provisional attachment of property, including bank accounts, to safeguard the interests of revenue in appropriate cases.
2. Procedure for Provisional Attachment: The procedure for provisional attachment and the subsequent release or restoration of such property is outlined in Rule 159 of the CGST Rules, 2017. Additionally, the GST Policy Wing has issued instructions on this matter, as per CBEC-20/16/05/2021-GST dated 23.02.2021.
3. Section 83(2) of the CGST Act: Section 83(2) of the CGST Act, 2017, specifies that every provisional attachment shall cease to have effect after one year from the date of the order made under sub-section (1).
4. Seeking Release of Provisional Attachment: In cases where provisional attachment, such as a bank account, is no longer valid due to the expiry of the one-year period, individuals have sought relief by filing writ petitions. They request that the Commissioner issue an intimation of the release of provisional attachment, as banks and relevant authorities often require such communication.
5. Board’s Prescribed Procedure: In consultation with the policy wing, it has been noted that while the property is no longer liable to provisional attachment in such cases, there is a need to establish a prescribed procedure for releasing/restoring such property. This procedure would include the use of a specified Form (similar to GST DRC-23).
6. Immediate Procedure for Convenience: For the time being, and to ensure the convenience of taxpayers, the Board has prescribed a procedure. In this procedure, the Commissioner will issue a communication or intimation to the concerned authority or bank. This communication will highlight the particulars of the Order/Form DRC-22 that led to the provisional attachment. It will also reference the provisions of section 83(2) of the CGST Act, 2017, and indicate the release/restoration of the relevant property or account, in accordance with those provisions. A copy of this intimation will be provided to the person concerned. This procedure is to be implemented immediately, including for dealing with similar pending cases.
Conclusion: This advisory from the Ministry of Finance provides clarity on the procedure to be followed for the release of provisional property attachments under the CGST Act, particularly in cases where the attachment ceases to have effect after one year. The prescribed procedure aims to facilitate a smoother process for taxpayers and authorities alike, ensuring compliance with the legal provisions of section 83(2) while maintaining transparency and efficiency in the tax administration system. It is important for individuals and entities to be aware of this procedure to safeguard their interests in such cases.
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Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST-Investigation Wing
10th Floor, Tower-2,
Jeevan Bharati Building,
Connaught Circus, New Delhi-110001.
F. No. GST/INV/Provisional Attachment/Advisory/2023-24 Dated: 2nd September, 2023
कार्यालय ज्ञापन
Subject: Procedure to be followed with respect to sub-section (2) of section 83 of CGST Act, 2017 when provisional attachment of property ceases to have effect – reg.
Attention is invited to section 83 of the CGST Act, 2017. It has the provisions to issue order for provisional attachment of property, including bank account, to protect interests of revenue in appropriate cases. At present, the procedure for provisional attachment and release/restoration of such property is prescribed in rule 159 of CGST Rules, 2017. In this regard, GST Policy Wing has also issued instructions vide CBEC-20/16/05/2021-GST dated 23.02.2021.
2. The section 83(2) of CGST Act, 2017 states – “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).” Where such provisions apply, say in the provisional attachment of bank account, there are instances noticed where person concerned filed writ petition seeking that Commissioner should also follow up by issuing intimation of release of such provisional attachment because Banks/relevant authority ask for such communication. Such matters have come up before the Hon’ble High Court of Delhi.
3.1 The matter has been examined in consultation with the policy wing. It is noted that in terms of the legal position of said section 83(2) of the Act, read with said rule 159, in effect, the property is no longer liable to provisional attachment, however, it requires further consultation and actions to incorporate a prescribed language for such type of release/restoration of provisional attachment in a specified Form (like GST DRC-23).
3.2 Therefore, for the present, and keeping in view the convenience of taxpayers, the Board prescribes the procedure that in such types of situations, the Commissioner shall issue communication/an intimation to the concerned authority/bank, drawing attention to the particulars of the Order/Form DRC-22 (which made the provisional attachment) and the provisions of section 83 (2) of the CGST Act, 2017, and further indicating the release/restoration of the relevant property/account, in terms of those provisions. This intimation shall be copied to the person concerned. This procedure be implemented immediately, including for dealing with similar pending cases.
(विजय मोहन जैन)
आयुक्त [जीएसटी – अवेषण], सीबीआईसी
दूरभाष सं. 011-21400623
ईमेल आईडी: gstinv-cbic@gov.in
To,
Pr. DG, DGGI, New Delhi.
Pr. Chief Commissioner/ Chief Commissioner, CGST Zones, All.
