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IN THE HIGH COURT OF DELHI AT NEW DELHI
Vibhu Bakhru, Amit Mahajan, JJ.
Gulati Enterprises – Appellant
Versus
Union of India & Ors. – Respondents
W.P.(C) 11223 of 2022 & CM APPL. 19805 of 2023
Decided On : 09-08-2023
Provisional Attachment - Central Goods and Services Tax Act, 2017 - The court disposed of the petition by directing the concerned bank not to interdict the operation of the petitioner's bank account due to the provisional attachment orders, as the last provisional order had become inoperative.
Fact of the Case:
The petitioner challenged orders attaching their bank accounts, but the last order had become inoperative as per Section 83(2) of the CGST Act.
Finding of the Court:
The court disposed of the petition by directing the concerned bank not to interdict the operation of the petitioner's bank account due to the provisional attachment orders.
Issues: Impugning orders attaching petitioner's bank accounts, inoperative last provisional order, and the petitioner's right to challenge further orders.
Ratio Decidendi: The last provisional order becoming inoperative rendered the petition academic, and the court directed the concerned bank not to interdict the operation of the petitioner's bank account.
Final Decision: The petition was disposed of by directing the concerned bank not to interdict the operation of the petitioner's bank account due to the provisional attachment orders, and the petitioner's right to challenge further orders was preserved.
JUDGMENT
Vibhu Bakhru, J. The petitioner has filed the present petition, inter alia, impugning orders dated 13.08.2019, 21.07.2020 & 04.08.2021 whereby the petitioner's bank accounts were attached. It is pointed out that in addition to the orders mentioned in the present petition, the Commissioner of CGST, Belapur had passed another order dated 05.08.2022, which in effect further extended the period of provisional attachment. One year has passed since the said order was passed and in terms of Section 83(2) of the Central Goods and Services Tax Act, 2017 (hereafter `the CGST Act'), the said order is no longer operative.
2. Mr. Hossain, learned counsel for respondent no.2 states that the Commissionerate at Belapur has not passed any further orders of provisional attachment of the petitioner's assets after 05.08.2022.
3. A tabular statement indicating the details of the orders of provisional attachment passed in respect of the petitioner's bank accounts is set out below:
| S. NO. | Bank Account Details | 1ST Provisional Attachment Order Date: 13.08.2019 | 2nd Provisional Attachment Order Date: 21.07.2019 | 3rd Provisional Attachment Order Date: 04.08.2021 | 4th Provisional Attachment Order Date: 05.08.2022 |
| 1. | Yes Bank Ltd. Dwarka Branch Account No.023663700000200 | Order Reference No.V/AE/Bel12-86/Gr.A/Gulati/20-19-20/1746 | Order Reference No.V/AE/Bel/Gr.E/12-27/Ritesh Creations/Enq/19-20/198 | Reference No.V/AE/Bel/Gr.E/12-27/Ritesh Creations/Enq/19-20/3860 | Order Reference No.V/AE/Bel/Gr.E/12-27/Ritesh Creations/Enq/19-20/2451 |
| 2. | HDFC Bank Ltd. Patparganj Industrial Area Account No.28407630000697 | Order Reference No.V/AE/Bel12-86/Gr.A/Gu lati/20-19-20/1748 | Order Reference No.V/AE/Bel/Gr.E/12-27/Ritesh | Order Reference No.V/AE/Bel/Gr.E/12-27/Ritesh Creations/Enq/19-20/200 Creations/Enq/19-20/2449 | Order Reference No.V/AE/Bel/Gr.E/12-27/Ritesh Creations/Enq/19-20/3858 |
| 3. | HDFC Bank Ltd. Patparganj Industrial Area Account No.28401530001344 | Order Reference No.V/AE/Bel12-86/Gr.A/Gulati/20-19-20/745 | Order Reference No.V/AE/Bel/Gr.E/12-27/Ritesh Creations/Enq/19-20/197 | Order Reference No.V/AE/Bel/Gr.E/12-27/Ritesh Creations/Enq/19-20/3861 | Order Reference No.V/AE/Bel/Gr.E/12-27/Ritesh Creations/Enq/19-20/2452 |
4. Since the order dated 05.08.2022 - which was the last provisional order passed by the Commissionerate at Belapur - is no longer operative, the present petition has been rendered academic.
5. In the given circumstances, we consider it apposite to dispose of the present petition by directing the concerned bank (respondent no.3) to not interdict the operation of the petitioner's bank account on account of any of the orders of the provisional attachment that are mentioned above.
6. The petition is disposed of the in the aforesaid directions.
7. It is clarified that if any further order of provisional attachment is passed, the petitioner is not precluded to assail the same.
8. All rights and contentions of the parties are reserved.
The inoperativeness of the last provisional order under Section 83(2) of the CGST Act rendered the petition academic, and the court directed the concerned bank not to interdict the operation of the p....
The operativeness of the last provisional order and its impact on rendering the petition academic.
The main legal point established in the judgment is that the provisional attachment under Section 83 of the CGST Act ceases to have effect after the expiry of one year from the date of the order, and....
Provisional attachment orders under Section 83 of the CGST/KGST Act automatically cease to have effect after one year, with no scope for renewal or reissuance by tax authorities.
Provisional orders of attachment under Section 83 of the CGST Act can be issued to protect revenue interests, but must be based on credible evidence and cannot continue beyond one year without justif....
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....
The legal principle established is that a provisional attachment under Section 83 of the CGST act ceases to have effect after one year from the date of the order.
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