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IN THE HIGH COURT OF DELHI
Manmohan, Sudhir Kumar Jain, JJ.
Naval Kumar - Appellant
Versus
Commissioner of Central Taxes GST Delhi East - Respondent
W.P.(C) 3659 of 2022 & C.M. Nos. 10847-10848 of 2022
Decided On : 08-03-2022
| Table of Content |
|---|
| 1. challenge to provisional attachment of properties. (Para 1) |
| 2. respondent's actions regarding notices and penalties. (Para 2 , 3 , 4) |
| 3. petitioner's consent to account freeze. (Para 5) |
| 4. court's directive on bank accounts and properties. (Para 6 , 7) |
JUDGMENT
Manmohan, J. (Oral)--Present writ petition has been filed challenging the letter dated 07th December, 2020 issued under Section 83 of the CGST Act, 2017 whereby the Respondent has directed the Bankers to provisionally attach the bank accounts as well as immovable properties of the three Petitioners. Petitioners also seek directions to the Respondents to release/de-freeze the personal bank accounts as well as immovable properties of the Petitioners which were provisionally attached vide the impugned letters.
2. On the last date of hearing, learned counsel for the Respondent had sought time to obtain instructions.
3. Today Mr.Harpreet Singh, learned standing counsel for the Respondent states that a show cause notice dated 15th July, 2021 under Section 74 of the CGST Act has been issued to all the Petitioners proposing imposition of penalty.
4. He further states that fresh DRC-22 notices have been issued to all the three Petitioners debit freezing their bank accounts for Rs.25,000/- each to secure the penalty imposed upon them under Section 122(3) of the CGST Act.
5. Learned counsel for the Petitioners states that without prejudice to the rights and contentions of the petitioners, they have no objection to their accounts being debit freezed for Rs.25,000/- each, subject to final determination of the show cause notices. He, however, prays that the amount lying over and above Rs.25,000/- in the bank accounts of each of the Petitioners be allowed to be withdrawn/utilized.
6. Keeping in view the aforesaid, this Court directs the bankers of the Petitioners to debit freeze the account of the Petitioners for Rs.25,000/- each. The immovable properties of the Petitioners are directed to be released/de-freezed not later than three days from today. The Petitioners' bankers are also directed to allow the Petitioners to utilize the amount lying in their bank accounts over and above the amount of Rs.25,000/-
7. With the aforesaid directions, the present writ petition along with pending applications stands disposed of.
The court ruled that accounts may be provisionally frozen for penalties but excess funds must be accessible to petitioners pending final determination.
Provisional attachment of bank accounts under Section 83(2) of the CGST Act ceases after one year unless a fresh order is issued.
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.
Provisional attachment orders under Section 83 of the CGST Act cease after one year unless proceedings are pending; failure to comply undermines enforcement actions.
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....
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 Section 83(2) of the CGST Act cease to be effective after one year, necessitating the release of affected bank accounts.
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.
Provisional attachment orders under the CGST act cease to have effect after one year, and no fresh attachment order can be issued thereafter.
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