The Delhi High Court has held that the life of an order of provisional attachment is only one year.The bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja has observed that the communication of attachment is dated August 14, 2019, and a period of one year has elapsed since the issuance of the communication. Consequently, the order dated August 14, 2019 has ceased to be effective...
The Delhi High Court has held that the life of an order of provisional attachment is only one year.
The bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja has observed that the communication of attachment is dated August 14, 2019, and a period of one year has elapsed since the issuance of the communication. Consequently, the order dated August 14, 2019 has ceased to be effective and cannot be further implemented either by the department or the bank. The order dated August 14, 2019 ceases to have effect. Consequently, the bank henceforth cannot restrain the operation of the bank account of the petitioner based solely on the basis of an order.
Section 83 of the GST Act empowers the Commissioner to provisionally attach any property, including a bank account, belonging to a taxable person for the purposes of protecting the interest of government revenue if, in the opinion of the Commissioner, it is necessary to do so. Section 83(2) stipulates that every provisional attachment ceases to have effect after the expiry of a period of one year from the date the order is made under Section 83(1) of the GST Act.
The petitioner/assessee has challenged the communication issued under Section 83 of the Central Goods and Service Tax Act, 2017 to the Branch Manager, HDFC Bank Ltd., Paschim Vihar Branch, to seize the outward movement of funds from the bank account of the petitioner.
The petitioner submitted that the validity of an order under Section 83 is one year, and despite the passage of one year, the bank is not permitting the operation of the account.
The court held that, in view of Section 83(2) of the GST Act, the life of an order of provisional attachment is only one year.
The court clarified that the order would be without prejudice to any other order of provisional attachment issued by either the respondents department or any other authority communicated to the HDFC Bank. In case any such order is communicated to the HDFC Bank, the bank shall give due credence to it irrespective of the court's order.
Counsel For Petitioner: Akhil Krishan Maggu
Counsel For Respondent: Ateev Mathur
Case Title: M/S Krish Overseas Versus Commissioner Central Tax-Delhi West & Ors.
Citation: 2024 LiveLaw (Del) 526
Case No.: W.P.(C) 5407/2024 & CM APPL. 22339/2024