Reevan Creation Vs State of Gujarat & Ors. (Gujarat High Court)
The Gujarat High Court allowed a writ petition challenging the continued provisional attachment of bank accounts and prolonged seizure of goods under the Goods and Services Tax Act, 2017. The petitioner, a partnership firm engaged in trading of gold, silver, diamonds, and jewellery, was subjected to a search under Section 67(2) of the GST Act in March 2022. Pursuant to the search, bank accounts were provisionally attached on 10.03.2022, and gold, silver, and cash were seized on 14.03.2022.
Despite the statutory framework prescribing strict timelines, the authorities failed to act in accordance with law. The Court noted that under Section 83(2) of the GST Act, a provisional attachment automatically ceases after one year unless a fresh order is passed. The respondents admitted in their affidavit that no fresh provisional attachment order was issued even after expiry of one year, resulting in continued freezing of the petitioner’s bank accounts without authority of law.
With respect to seizure of goods, the Court referred to Section 67(7) of the GST Act, which mandates that if no notice is issued within six months of seizure, the goods must be returned to the person from whose possession they were seized. Although the statute permits extension of this period by a further six months on sufficient cause, the respondents neither issued a notice within the initial six months nor invoked the proviso for extension. Instead, a notice under Section 130 of the GST Act was issued only on 21.06.2024—more than two years after seizure and during pendency of the writ petition.
