Provisional attachment orders under the CGST Act cannot be re-issued after one year, emphasizing strict statutory interpretation and the protection of property rights.

JUDGMENT :

Easwaran S, J.

The appeal is preferred by the Revenue aggrieved by the judgment of the learned Single Judge holding that an order of provisional attachment issued under Section 83 of the Central Goods and Services Tax Act, 2017 cannot continue beyond a period of one year and that on the same set of facts, a fresh order of provisional attachment cannot be issued thereafter.

2. In the appeal before us, the Revenue contends that the interpretation placed by the learned Single Judge goes against the statute and, thereby, the interest of the Revenue is substantially prejudiced and thus requires reconsideration by this Court.

3. The short facts for the disposal of the appeal are as follows: The petitioners are the partners of 'SR Traders' dealing primarily in the trade of scrap. On 4.5.2023, a notice to show cause was issued in terms of Section 74 of the Central Goods and Services Tax Act, 2017 ('CGST Act', for short). Immediately thereof, the appellants issued a notice of provisional attachment over immovable properties as well as freezing of Bank accounts. The said action of the appellants were questioned before this Court in WP(C) No.12519/2023, which resulted in dismissal of Writ Petition by Ext.P3 judgment. On appeal preferred against Ext.P3 judgment, a Division Bench of this Court in W.A.No.1250/2023 (Ext.P4) allowed the writ petitioner to operate two accounts while confirming the order of attachment over the other accounts. Thereafter, after a period of one year, the first appellant issued a fresh order under Section 83(1) of the CGST Act and issued an intimation to the Sub Registrar's office intimating the order of attachment. Challenging re-issuance of the order of attachment, the petitioners approached the writ court. On consideration of the writ petition, the learned Single Judge held that Section 83 of the CGST Act has to be construed strictly and the statute does not authorise the authorities to re-issue the order of attachment which has ceased to have operational on expiry of one year. While forming an opinion, the learned Single Judge followed the settled rule of interpretation of statutes.

4. Heard Sri.Sreelal Warriar, the learned counsel appearing for the appellants.

5. The learned counsel appearing for the appellants primarily contended that though Sub-Section (2) of Section 83 of CGST/SGST Act provides that the attachment will cease to operate after a period of one year from the date of issuance of the same, nothing prevents the authorities from issuing a fresh order of attachment. In support of his contention relied on the decision of the Division Bench of the Gujarat High Court in Shrimati Priti W/o Anil Amrutlal Gandhi v. State of Gujarat thro' Assistant Commissioner in Special Civil Application No.862/2011 dated 11.3.2011 [2011 SCC Online Guj 1869], wherein a pari materia provision under Section 45 of the Gujarat Value Added Tax Act, 2003 was considered and it was held that nothing prohibits the authority from re-issuing the attachment orders on expiry of one year period mentioned therein. The learned counsel further pointed out that in cases where the investigation cannot be completed within a period of one year as provided under sub-Section (2) of Section 83, the interest of the Revenue will be prejudiced and therefore, it is in order to protect the interest of the Revenue that the order of attachment can be re-issued. The learned counsel would further point out that the interpretation placed by the learned Single Judge is contrary to the statute for which purpose, it was enacted. By referring to the preamble of the Act and also the provisions of Article 265 of the Constitution of India, the learned counsel for the appellants submitted that interpretation which would defeat the purpose of the statute has to be avoided and thus the learned Single Judge erred in rendering the impugned judgment.

6. We have bestowed our anxious consideration to the submissions of the learned Counsel for the appellants.

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