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IN THE HIGH COURT OF DELHI AT NEW DELHI
Manmohan, Navin Chawla, JJ.
M/s Shri Dhan Laxmi Trade House Pvt. Ltd. - Appellant
Versus
Principal Commissioner Of Goods And Service Tax & Anr. - Respondents
Civil Writ Petition No. 13080 of 2021
Decided On : 22-11-2021
CGST Act - Provisional Attachment - The court directed the Respondents to de-freeze the Petitioner's Current Account based on Section 83(2) of the CGST Act, which provides that provisional attachment shall cease to have effect after one year from the date the order was made under Section 83(1).
Fact of the Case:
The Petitioner sought directions to defreeze their Current Account, which had been frozen by the Respondents under Section 67 of the CGST Act. The Petitioner's account had been frozen without issuance of a show cause notice for any amount liable to be paid.
Finding of the Court:
The court found that as per Section 83(2) of the CGST Act, the provisional attachment of the account should have ceased after one year from the date the order was made under Section 83(1). The Respondents were directed to de-freeze the Petitioner's account within three working days.
Issues: The issues involved the freezing of the Petitioner's account without issuance of a show cause notice and the applicability of Section 83(2) of the CGST Act.
Ratio Decidendi: The court relied on Section 83(2) of the CGST Act, which provides for the cessation of provisional attachment after one year from the date the order was made under Section 83(1), and directed the Respondents to de-freeze the account based on this provision.
Final Decision: The court allowed the writ petition and directed the Respondents to de-freeze the Petitioner's Current Account within three working days.
JUDGMENT
Manmohan, J. - C.M.No.41260/2021
Exemption allowed, subject to all just exceptions.
Accordingly, the application stands disposed of.
W.P.(C) 13080/2021
1. By way of the present petition, Petitioner seeks directions to the Respondents to defreeze the Petitioner’s Current Account No.181905001156 with Respondent No.2-Bank.
2. Learned Counsel for the Petitioner states that the Petitioner’s account had been directed to be debit freezed by Respondent No.1 vide letter dated 10th August, 2020 written to the Respondent No. 2-Bank. He states that the account had been attached merely on account of initiation of proceedings by Respondent No.1 against the Petitioner under Section 67 of the CGST Act i.e. to determine if there is any tax amount due and payable by the petitioner.
3. Learned Counsel for the Petitioner submits that Section 83(2) of the CGST Act, 2017 provides that every provisional attachment shall cease to have effect after the expiry of one year from the date the order had been made under sub-Section (1). He states that in the instant case though the account of the petitioner had been debit freezed vide letter dated 10th August, 2020 and the period of one year had ended on 9th August, 2021, yet the account of Petitioner has not been de-freezed. He emphasises that the Petitioner has not been issued any show cause notice for any amount liable to be paid by it.
4. Issue notice.
5. Mr.Dhruv Bhattacharya, Advocate accepts notice on behalf of respondent no.1 and Mr.Rachit Bigghe, Advocate accepts notice on behalf of respondent no.2/ICICI Bank.
6. At Court’s direction, learned counsel for respondent no.1 has obtained instructions. He admits that every provisional attachment shall cease to have effect after the expiry of period of one year from the date the order had been passed under Section 83(1) of the Act.
7. In view of the aforesaid statement, the present writ petition is allowed and the Respondents are directed to de-freeze the Petitioner’s Current Account No.181905001156 with Respondent no.2-Bank, within three working days of uploading of the present order.
8. With the aforesaid directions, the present writ petition stands disposed of.
Section 83(2) of the CGST Act provides for the cessation of provisional attachment after one year from the date the order was made under Section 83(1).
Provisional attachments under GST cease after one year if no show cause notice is issued, affirming the need for timely communication in tax proceedings.
The main legal point established in the judgment is that the provisional attachment order of a bank account ceases to have effect after one year from the date of issuance under Section 83 of the CGST....
Provisional attachment orders under Section 83 of the CGST Act cease after one year unless proceedings are pending; failure to comply undermines enforcement actions.
Provisional attachment of bank accounts under Section 83(2) of the CGST Act ceases after one year unless a fresh order is issued.
The court ruled that accounts may be provisionally frozen for penalties but excess funds must be accessible to petitioners pending final determination.
Provisional attachment orders under Section 83(2) of the CGST Act cease to be effective after one year, necessitating the release of affected bank accounts.
The power under Section 83 of the CGST Act can only be exercised subject to specified conditions and by the Commissioner, and not by any other officer.
Provisional attachment orders under the CGST act cease to have effect after one year, and no fresh attachment order can be issued thereafter.
Provisional attachment of bank accounts under the CGST Act ceases to be valid after one year unless renewed, emphasizing the necessity for adherence to legal procedures.
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