1. Provisional attachment of bank accounts under Section 83, CGST Act — Lapse of initial orders after one year — Issuance of subsequent renewal orders. (Para 1 , 2 )
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2025 Supreme(SC) 1207
SUPREME COURT OF INDIA
DIPANKAR DATTA, AUGUSTINE GEORGE MASIH, JJ.
Kesari Nandan Mobile – Appellant
Versus
Office of Assistant Commissioner Of State Tax (2), Enforcement Division – 5 – Respondent
Civil Appeal No. 9543 of 2025
Decided On : 14-08-2025
Important Points
The Central Goods and Services Tax Act does not permit the renewal of provisional attachment orders beyond one year, maintaining strict adherence to legislative intent that prohibits such re-issuance.
Subject
Tax Law - Goods and Services Tax
Act Referred
CENTRAL GOODS AND SERVICES TAX ACT: S.83
CENTRAL GOODS AND SERVICES TAX RULES: R.159, R.83(2)
CONSTITUTION OF INDIA: Art.73
CUSTOMS ACT: S.28(b)(a)
GUJARAT VALUE ADDED TAX ACT: S.45
CENTRAL GOODS AND SERVICES TAX RULES: R.159, R.83(2)
CONSTITUTION OF INDIA: Art.73
CUSTOMS ACT: S.28(b)(a)
GUJARAT VALUE ADDED TAX ACT: S.45
Headnote
(A) Central Goods and Services Tax Act, 2017 - Section 83 - Provisional attachment of property - Appeal against renewal of provisional attachment order after lapsed - High Court upheld the renewal, citing absence of embargo under the Act - Supreme Court held that second order cannot be issued after first lapses by time limit of one year. (Paras 14-41)
(B) Taxation Law - Statutory powers must adhere strictly to legislative intent - The power to attach property is draconian and must not be exercised beyond the provisions defined in statute - Any interpretation allowing renewal after one year undermines legislative authority. (Paras 17, 30)
Facts of the case:
The appellant challenged the legality of fresh provisional attachment orders for bank accounts, after the lapsing of earlier orders, considering the provisions of Section 83 of the CGST Act.
Findings of Court:
The issuance of the new provisional attachment orders was held invalid as they contravened statutory limits, resulting in the lifting of attachments on the bank accounts.
Issues: Whether the CGST Act permits a second provisional attachment order after the initial order's validity ceases?
Ratio Decidendi: The court found that Section 83 clearly states that provisional attachments lapse after one year. Issuing new orders without provision for extension contravenes legislative intent.
Result: Appeal allowed; provisional attachment orders quashed.
(B) Taxation Law - Statutory powers must adhere strictly to legislative intent - The power to attach property is draconian and must not be exercised beyond the provisions defined in statute - Any interpretation allowing renewal after one year undermines legislative authority. (Paras 17, 30)
Facts of the case:
The appellant challenged the legality of fresh provisional attachment orders for bank accounts, after the lapsing of earlier orders, considering the provisions of Section 83 of the CGST Act.
Findings of Court:
The issuance of the new provisional attachment orders was held invalid as they contravened statutory limits, resulting in the lifting of attachments on the bank accounts.
Issues: Whether the CGST Act permits a second provisional attachment order after the initial order's validity ceases?
Ratio Decidendi: The court found that Section 83 clearly states that provisional attachments lapse after one year. Issuing new orders without provision for extension contravenes legislative intent.
Result: Appeal allowed; provisional attachment orders quashed.
Legal Category Hierarchy
Advocates appeared:
For the Appellant(s) : Mr. Ashutosh Dave, Adv. Mr. Pradhuman Gohil, Adv. Mrs. Taruna Singh Gohil, AOR Mr. Alapati Sahithya Krishna, Adv. Ms. Hetvi Ketan Patel, Adv. Mr. Rushabh N. Kapadia, Adv. Ms. Taniya Bansal, Adv.
For the Respondent(s): Ms. Deepanwita Priyanka, AOR Mr. Anuj Chaudhary, Adv.
For the Appellant(s) : Mr. Ashutosh Dave, Adv. Mr. Pradhuman Gohil, Adv. Mrs. Taruna Singh Gohil, AOR Mr. Alapati Sahithya Krishna, Adv. Ms. Hetvi Ketan Patel, Adv. Mr. Rushabh N. Kapadia, Adv. Ms. Taniya Bansal, Adv.
For the Respondent(s): Ms. Deepanwita Priyanka, AOR Mr. Anuj Chaudhary, Adv.
Table of Contents
2. Whether the absence of an express prohibition in the CGST Act permits the issuance of a second provisional attachment order after the first has lapsed. (Para 5 , 6 , 8 , 9 , 10 , 12 )
3. Section 83 is draconian; statutory authorities cannot exercise powers not conferred by law; allowing renewal would render the one-year statutory limit otiose. (Para 17 , 18 , 19 , 20 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 )
4. Provisional attachment under Section 83, CGST Act, ceases after one year; no statutory provision exists for renewal, extension, or re-issuance of such orders. (Para 19 , 29 , 30 , 39 , 41 )
5. Appeal allowed — Impugned provisional attachment orders set aside — Bank accounts ordered to be de-freezed and made operable. (Para 41 , 42 )
6. Can a provisional attachment order under Section 83 of the CGST Act be renewed or re-issued after one year?
No. Section 83(2) explicitly states that provisional attachment ceases to have effect after one year. The Act contains no provision for renewal, extension, or re-issuance. Allowing such actions would render the statutory time limit otiose and exceed the authority conferred by the statute. (Para 19 , 29 , 30 , 39 , 41 )
7. How does the CGST Act differ from the Excise Act and Customs Act regarding provisional attachment extensions?
Unlike the CGST Act, the Excise Act (Section 11DDA) and the Customs Act (Section 28BA) specifically provide for the extension of provisional attachment for a cumulative period. The absence of such a provision in the CGST Act indicates a legislative intent to limit attachment to one year. (Para 6 , 32 , 39 )
8. Can a statutory authority act on the basis that a specific action is not expressly prohibited by the statute?
No. A statutory authority can only perform acts permissible under the statute. It cannot do something not provided for in law. While executive power can supplement statutory law, it cannot supplant it or act inconsistently with it. (Para 22 , 26 , 27 , 28 )
9. What is the legal nature and purpose of provisional attachment under Section 83 of the CGST Act?
It is a draconian, pre-emptive measure intended solely to protect government revenue during proceedings. It cannot be used as a recovery measure, as the statute provides separate provisions for the recovery of assessed tax, penalties, and interest. (Para 17 , 18 , 32 )
JUDGMENT
DIPANKAR DATTA J.
1. This civil appeal, by special leave, takes exception to the judgment and order dated 29th January, 20251[impugned order] passed by a Division Bench of the High Court of Gujarat at Ahmedabad2[Gujarat High Court] dismissing a writ petition3[R/Special Civil Application No.16339 of 2024] presented before it by the appellant.
2. The writ petition was directed against provisional attachment orders dated 13th November, 2024 and 18th December, 2024 issued by the respondent in purported exercise of power conferred by Section 83 of the Central Goods and Services Tax Act, 20174[CGST Act]. The case run by the appellant in its writ petition was that prior to issuance of the impugned provisional attachment orders (dated 13th November, 2024 and 18th December, 2024), the respondent had issued provisional attachment orders dated 17th October, 2023 and 26th October, 2023; that the appellant had objected to such provisional attachment orders by submitting a representation dated 1st May, 2024 as permitted by Rule 159 (5) of the CENTRAL GOODS AND SERVICES TAX RULES , 20175[CGST Rules]; that the respondent, despite receipt of such representation, did not decide the same and kept the same pending; that, in terms of sub-section (2) of Section 83 of the CGST Act, the provisional attachment orders dated 17th October, 2023 and 26th October, 2023 lapsed upon expiry of a year, i.e., with effect from 18th October, 2024, and 27th October, 2024, respectively; and that, despite having no jurisdiction conferred by law, the respondent proceeded to pass fresh provisional attachment orders dated 13th November, 2024 and 18th December, 2024 terming it as a ‘RENEWAL’ of the earlier orders. Accordingly, it was prayed that the provisional attachment orders dated 13th November, 2024 and 18th December, 2024 be quashed and set aside and the attachment lifted to enable the appellant operate its bank accounts.
3. The Gujarat High Court, while spurning the appellant’s challenge, held in the impugned order that the law does not place any embargo for a second provisional attachment order to be issued after lapse of the earlier order and that the respondent, intending to safeguard the interest of the revenue, did not commit any breach of Section 83 of the CGST Act.
4. Legality and correctness of such reasons are under assail in this appeal.
5. Mr. Dave, learned counsel for the appellant, contends that the impugned order is indefensible. The reason assigned by the High Court is fundamentally flawed inasmuch as it travelled beyond the legislative intent and purpose of securing the interest of the revenue, overlooking that the life of a provisional attachment order is only for a year from the date it is issued.
6. Drawing a parallel with the provisions of the Central Excise Act, 19446[Excise Act] and the CUSTOMS ACT , 19627[ CUSTOMS ACT ], Mr. Dave further contends that both these taxing statutes provide for provisional attachment. In case of the Excise Act, Section 11DDA provides for provisional attachment. Sub-section (2) of Section 11DDA provides that the attachment shall cease to have effect after 6 months from the date of the order. This section further provides that the attachment may be extended, such that the total period does not exceed two years. Similar to the Excise Act, Section 28BA of the CUSTOMS ACT also provides for provisional attachment. Sub-section (2) of Section 28BA provides that the attachment may be extended for such period, not exceeding a cumulative period of two years. Juxtaposing these provisions with Section 83 of the CGST Act, it is the contention of Mr. Dave that there is no provision for extending the validity of a provisional attachment order under the latter enactment after its lapse. Absent such provision, and the attachment necessarily having lapsed after one year, he contends that the respondent could not have attached the bank accounts again.
7. Reliance is placed on an order dated 18th September, 2024, passed by a co-o
