Kesari Nandan Mobile vs. Office Of Assistant Commissioner Of State Tax (2), Enforcement Division – 5

Held

The Supreme Court held that the respondent authority could not have issued the impugned provisional attachment orders dated November 13, 2024, and December 18, 2024, as the previous orders had ceased to have effect by operation of law after one year of their issuance, as per Section 83(2) of the CGST Act, 2017. The Court reasoned that when a statute does not provide for an extension, renewal, re-issuance, or revival, the executive cannot overreach the statute. The deliberate omission of an extension provision in Section 83 was considered significant. Allowing the revenue to issue fresh orders after the lapse of the initial ones would render Section 83(2) otiose. The Court found the issuance of the subsequent orders, premised on substantially the same grounds, to be in disregard of the safeguard provided in Section 83(2). The bank accounts attached by the respondent were ordered to be de-freezed and made operable forthwith. The Court expressly did not consider the contention regarding delegation and assumption of jurisdiction, as the impugned orders were liable to be set aside on the point of law discussed.

Facts

The appellant, Kesari Nandan Mobile, challenged two provisional attachment orders dated November 13, 2024, and December 18, 2024, issued by the Assistant Commissioner of State Tax. These orders were termed as 'renewals' of earlier provisional attachment orders dated October 17, 2023, and October 26, 2023. The appellant argued that the initial orders had lapsed after one year, as per Section 83(2) of the CGST Act, 2017, and the respondent authority had no jurisdiction to issue fresh orders. The appellant sought to have its bank accounts unfrozen. The Gujarat High Court dismissed the writ petition, holding that there was no embargo on issuing a second provisional attachment order after the lapse of the first. The appellant appealed this decision.

Key Issues

1. Whether the Central Goods and Services Tax Act, 2017, permits the issuance of a second provisional attachment order under Section 83(1) after the initial order issued thereunder ceases to have effect by reason of efflux of one year from its issuance, as stipulated in Section 83(2)? Petitioner's Arguments: The petitioner contended that Section 83(2) of the CGST Act, 2017, clearly states that a provisional attachment order ceases to have effect after one year. Therefore, the respondent authority lacked jurisdiction to issue subsequent orders, terming them as 'renewals,' as the statute does not provide for such extension or renewal. They argued that the executive cannot overreach the statute. They relied on precedents where similar actions were questioned. Revenue's Arguments: The judgment does not explicitly record arguments made by the revenue. However, the High Court's reasoning, which was challenged by the appellant, suggested that the law does not place an embargo on issuing a second provisional attachment order after the lapse of the earlier one, and that the respondent acted to safeguard revenue interests.