Ankur Dealcom Private Limited vs. Commissioner Central GST And Cx, Patna - Ii And Ors.

Facts

The petitioners, M/s. Amit Metaliks Limited and Ankur Dealcom Private Limited, filed writ petitions challenging orders of provisional attachment of their bank accounts issued under Section 83 of the Central Goods & Services Tax Act, 2017 (the "said Act") by the Commissioner, CGST & Central Excise, Patna-II, dated 3rd January, 2025. The petitioners initially sought to declare these proceedings void for lack of jurisdiction. However, as over a year had elapsed since the attachment orders, the petitioners argued that the attachments had ceased to have effect under Section 83(2) of the said Act. They reported that their banks had not defreezed the accounts despite requests, and there was no response from the revenue authorities. The revenue authorities conceded that the effect of Section 83(2) would follow, but argued the petitions could not be converted to seek mandatory directions against the banks.

Held

The Court held that the provisional attachment order dated 3rd January, 2025, issued under Section 83(1) of the Central Goods & Services Tax Act, 2017, had ceased to have effect by operation of law, specifically Section 83(2) of the said Act, due to the expiry of the one-year period from the date of the order. The Court relied on the Supreme Court's judgment in Kesari Nandan Mobile v. Office of Assistant Commissioner of State Tax, which unequivocally held that such provisional attachments cease to have effect after one year and that no extension is permissible if not provided for in the statute. Consequently, neither the Commissioner nor the petitioner's banker could continue to freeze the petitioner's property or bank accounts based on the expired order. The Court explicitly stated that it was not going into the issue of the Commissioner's initial jurisdiction or competence to pass the order. The writ petition was partly allowed to the extent that the attachment order had ceased to have effect.

Key Issues

1. Whether a provisional attachment order issued under Section 83(1) of the Central Goods & Services Tax Act, 2017, ceases to have effect after the expiry of one year from the date of the order, as stipulated in Section 83(2) of the said Act? 2. Whether the Court can issue directions to defreeze bank accounts when a provisional attachment order has ceased to have effect due to the efflux of time? Petitioner's arguments: The petitioner contended that the provisional attachment order dated 3rd January, 2025, had lost its force and ceased to have effect by operation of law, specifically Section 83(2) of the said Act, as more than one year had passed since its issuance. They relied on the Supreme Court's judgment in Kesari Nandan Mobile v. Office of Assistant Commissioner of State Tax, which clarified that no extension of such a provision is permissible when the statute does not provide for it. Therefore, the petitioner sought a declaration to this effect and the ability to utilize their property without fetters. Revenue's arguments: The revenue authorities stated that since the petitioner was no longer pursuing the issue of the Commissioner's competence, they did not wish to advance further arguments, save that the effect of Section 83(2) would follow. They also submitted that the present petition could not be converted into one seeking mandatory directions against the banks.