Provisionally attachment cannot extend after One Year: Delhi HC

[CA Bimal Jain]

The Hon’ble High Court, Delhi in the matter of SH. NITIN SINGHANIA VERSUS COMMISSIONER OF CENTRAL TAX GST, DELHI (EAST) [2022 (8) TMI 369 - DELHI HIGH COURT] set aside the order passed by the department in order to attach the bank account of the assessee for more than one year and held that as per section 83 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) the prescribed time limit for provisional attachment is one year.

Facts:

The Central Goods and Services Tax, Delhi East (“the Respondent”) vide order dated March 31,2021 (“the Impugned Order”) provisionally attached the bank accounts and immovable property of M/s SH. Nitin Singhania (“the Petitioner”). Being aggrieved by the Impugned Order, the Petitioner, filed present writ petition with a prayer to direction the Respondent to quash and set-aside the Impugned Order issued by the Respondent in the interest of justice.

Petitioner’s Contention:

• As per Section 83 of the CGST Act, the maximum time frame available to the Respondent for keeping the attachment alive is one year.

Issue:

• Whether the provisional attachment after the prescribed period under Section 83 of the CGST Act be reviewed or extended?

Held:

The Hon’ble High Court, Delhi in SH. NITIN SINGHANIA VERSUS COMMISSIONER OF CENTRAL TAX GST, DELHI (EAST) [2022 (8) TMI 369 - DELHI HIGH COURT] has held as under:

• On a plain reading of Section 83 of the CGST Act, the attachment order cannot continue beyond one year.
• Held that, accordingly, the Respondent is directed to lift the attachment and convey the information in this behalf, to the concerned bank, within three days of the receipt of a copy of the order passed today.
• Accordingly, the prayer made by the Petitioner are allowed.

Relevant Provision:

Section 83 of the CGST Act:

Provisional attachment to protect revenue in certain cases.

(1) Where, after the initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue it is necessary so to do, he may, by order in writing, attach provisionally, any property, including bank account, belonging to the taxable person or any person specified in sub-section (1A) of section 122, in such manner as may be prescribed.

(2) Every such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the order made under sub-section (1).

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