Provisional Attachment Order under CGST Act Limited to One-Year: Delhi HC

Krish Overseas Vs Commissioner Central Tax-Delhi West & Ors (Delhi High Court)

The recent judgment by the Delhi High Court in the case of Krish Overseas Vs Commissioner Central Tax highlights the interpretation of Section 83 of the Central Goods and Services Tax Act, 2017. The court addressed the validity of a communication dated 14.08.2019, issued under Section 83, directing the provisional attachment of a bank account belonging to the petitioner.

The petitioner contested the communication issued under Section 83, arguing that the validity of such an order is limited to one year. Despite the passage of one year since the issuance of the order, the bank continued to restrain operations on the petitioner’s account. The court, upon hearing the arguments, delved into the provisions of Section 83 of the Act.

Section 83 grants the Commissioner the authority to provisionally attach properties, including bank accounts, to safeguard government revenue during certain proceedings. Subsection (2) of Section 83 stipulates that such provisional attachments expire after one year from the date of the order. The court emphasized the temporal limitation of the attachment order and declared the order issued on 14.08.2019 null and void due to its expiration.

Furthermore, the court clarified that HDFC Bank, the respondent in this case, is no longer permitted to restrain the operations of the petitioner’s bank account based solely on the expired order. However, the judgment clarified that this decision does not prejudice any other valid order of attachment communicated to the bank by relevant authorities.

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