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IN THE HIGH COURT OF DELHI AT NEW DELHI
Vibhu Bakhru, Amit Mahajan, JJ.
Tarun Gulati – Appellant
Versus
Union of India & Ors. – Respondents
W.P.(C) 11229 of 2022
Decided On : 09-08-2023
Provisional Attachment - Central Goods and Services Tax Act - The court held that the last provisional order passed by the Commissionerate at Belapur was no longer operative, rendering the present petition academic. The court directed the concerned bank not to interdict the operation of the petitioner's bank account based on any of the previous orders of provisional attachment.
Fact of the Case:
The petitioner challenged orders attaching their bank accounts, including a subsequent order extending the period of provisional attachment. The last order was no longer operative, making the petition academic.
Finding of the Court:
The court directed the concerned bank not to interdict the operation of the petitioner's bank account based on any of the previous orders of provisional attachment and disposed of the petition accordingly.
Issues: Impugning orders attaching petitioner's bank accounts, operativeness of the last provisional order, and direction to the concerned bank.
Ratio Decidendi: The operativeness of the last provisional order rendered the petition academic, and the court directed the concerned bank not to interdict the operation of the petitioner's bank account based on any of the previous orders of provisional attachment.
Final Decision: The petition was disposed of by directing the concerned bank not to interdict the operation of the petitioner's bank account based on any of the previous orders of provisional attachment, with the petitioner reserving the right to challenge any further order of provisional attachment.
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 has passed another order dated 05.08.2022, which in effect had further extended the period of provisional attachment. One year has passed from the date of passing of the said order. Thus, 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 appearing from the respondents, states that the Commissionerate at Belapur has not passed any further orders 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. | IndusInd Bank Ltd. Indirapuram, Ghaziabad Branch Account No.159910493857 | Order Reference No.V/AE/Bel12-86/Gr.A/Gulati/2019-20/1740 | Order Reference No.V/AE/Bel/Gr.E/12-27/Ritesh Creations/Enq/19-20/192 | Order Reference No.V/AE/Bel/Gr.E/12-27/Ritesh Creations/Enq/19-20/3866 | Order Reference No.V/AE/Bel/Gr.E/12-27/Ritesh Creations/Enq/19-20/2457 |
| 2. | HDFC Bank Ltd. Patparganj Industrial Area Account No.28401530001224 | Order Reference No.V/AE/Bel12-86/Gr.A/Gulati/2019-20/1741 | Order Reference No.V/AE/Bel/Gr.E/12-27/Ritesh Creations/Enq/19-20/193 | Order Reference No.V/AE/Bel/Gr.E/12-27/Ritesh Creations/Enq/19-20/3864 | Order Reference No.V/AE/Bel/Gr.E/12-27/Ritesh Creations/Enq/19-20/2456 |
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 provisional attachment that are included in the tabular statement set out 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 operativeness of the last provisional order and its impact on rendering the petition academic.
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 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....
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.
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....
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