According to the Bombay High Court, a GST provisional attachment order becomes invalid after one year. Justices G.S. Kulkarni and Jitendra Jain noted that the communication issued on April 21, 2022, which provisionally attached the petitioner's bank account, is rendered unlawful and invalid under the provisions of Section 83(2) of the CST Act. The court further deemed the extension of the provisional attachment through the communication dated April 19, 2023, as illegal.
Brief Facts:
The petitioner, who is also the assessee, contested the provisional attachment of their bank account by the bank, which was carried out in accordance with Section 83 of the CST Act, 2017. They further challenged a communication dated April 19, 2023, which confirmed the retention of the provisional attachment that was originally made on April 21, 2022, under Section 83 of the GST Act. The petitioner filed the petition after their objections to the provisional attachment were addressed and resolved by the respondents in accordance with Rule 159(5) of the CGST Rules.
Contentions of the Petitioner:
The petitioner argued that according to Section 83(2), the provisional attachment carried out under Section 83(1) should cease to be effective after a period of one year from the date of the order issued under subsection (1). In this case, the provisional attachment order was issued on April 21, 2022, and one year from that date expired on April 21, 2023.
Contentions of the Respondents:
On the other hand, the respondent contended that the letter in question is merely a communication sent to the bankers, with a copy also provided to the petitioner. They claimed that a fresh order had been passed, as indicated on the order sheet, with a copy attached to their response. The respondent argued that since a new provisional attachment order had been issued for the petitioner's bank account, the provisional attachment mentioned in the communication dated April 19, 2023, remains valid.
Observations of the Court:
The court did not find any evidence of a recent order being issued by the respondents to attach the bank account on April 19, 2023. The court emphasized that mere notations in the file of the concerned officer cannot be considered as an order, as the law may require a formal order to be passed and, most importantly, communicated to the affected individual whose bank account is being attached.
Furthermore, the court noted that the department failed to provide any proof that the order had been passed and served on the petitioner, especially prior to the expiration of the provisional attachment order as stated in Section 83(2) and the communication dated April 19, 2023.
The decision of the Court:
The Bombay HC quashed the extension of the provisional attachment by communication dated 19th April 2023.
Case Title: Bharat Parihar Vs. State of Maharashtra
Coram: Hon’ble Justice G.S. Kulkarni and Jitendra Jain
Case no: Writ Petition No.3742 Of 2023
Advocate for the Petitioner: Mr. Brijesh Pathak
Advocate for the Respondent: - Ms. Shruti D. Vyas
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