DGGI Powers to Provisionally Attach Bank Accounts under CGST Act Upheld: Delhi HC

The High Court of Delhi has addressed a significant challenge regarding the powers of the Directorate General of GST Intelligence (DGGI) to provisionally attach bank accounts under the Central Goods and Services Tax Act, 2017 . In the case of GMG Tradelink Pvt. Ltd. vs. Directorate General of GST Intelligence HQ & Ors. , the bench led by Justice Prathiba M. Singh and Justice Shail Jain affirmed that the DGGI is duly authorized to carry out such actions to protect government revenue.

Background of the Dispute

The petitioner, GMG Tradelink Pvt. Ltd., approached the court challenging an order dated March 6, 2025, issued by the Principal Additional Director General of the DGGI. The order aimed to provisionally attach the company’s current accounts held at ICICI Bank Ltd., Bhiwani Mandi Branch.

The crux of the petitioner's argument centered on the statutory authority of the issuing officer. The counsel for the petitioner contended that the Principal Additional Director General lacked the mandate under Section 83 of the CGST Act 2017 to order the provisional attachment of bank accounts.

Legal Analysis and the Court’s Reasoning

To resolve the dispute, the Court examined the relevant provisions of the CGST Act. Section 83 of the Act empowers the Commissioner to order the provisional attachment of any property, including bank accounts, if they are of the opinion that such a move is necessary to protect the interest of government revenue.

During the proceedings, the Respondent presented a pivotal document: Notification No. 14/2017, dated July 1, 2017, issued by the Ministry of Finance, Department of Revenue, under the Central Board of Excise and Customs. This notification explicitly designates the Principal Additional Director General, Goods and Services Tax Intelligence, as equivalent to the Principal Commissioner of Goods and Services Tax.

Relying on this notification, the High Court observed that the argument regarding a lack of competence was unsustainable. The court held that the authority exercised by the DGGI official was fully supported by the legislative delegation of power.

Key Observations

The High Court emphasized the importance of following the prescribed statutory procedure while ensuring taxpayers have the right to recourse. In its decision, the Court noted:

> "In view of the aforesaid Notification dated 1st July, 2017, the above plea made by the Petitioner would not be sustainable."

The Court further ensured that the petitioner's right to contest the attachment was preserved:

> "Additionally, the Petitioner is permitted to file fresh objections in respect of the provisional attachment, and upon filing of the same, the reasons of the provisional attachment shall be communicated to the Petitioner within a period of two weeks."

Implications of the Verdict

By disposing of the writ petition, the High Court has reaffirmed the operational scope of the DGGI in tax recovery and protection. While the court upheld the legitimacy of the provisional attachment, it directed the authorities to communicate the specific reasons for the attachment to the petitioner. This ensures that the process—while robust— remains transparent, leaving all legal remedies open for the petitioner to pursue once the reasons are provided. This ruling provides clarity for both taxpayers and enforcement agencies regarding the hierarchy and power of GST enforcement officials.