Smt Ritu Mandelia v. The Union Of INDIA And 7 Ors - Gauhati High Court, 30 Aug 2026

Judgment

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GAHC010165522026

2026:GAU-AS:12866

THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : WP(C)/4286/2026

SMT RITU MANDELIA WIFE OF AMAR KUMAR MANDELIA, RESIDENT OF FLAT NO. 4AB, TOWER- II, EMPIRE BUILDING, 16A, GURUSADAY DUTTA ROAD, KOLKATA, WEST BENGAL- 700019.

VERSUS THE UNION OF INDIA AND 7 ORS REPRESENTED BY THE SECRETARY OF GOVERNMENT OF INDIA, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, ROOM NO. 66, NORTH BLOCK, NEW DELHI - 110001.

2:THE PRINCIPAL COMMISSIONER CENTRAL GOODS AND SERVICE TAX CENTRAL EXCISE AND CUSTOMS 5TH FLOOR GST BHAWAN KEDAR ROAD MACHKHOWA GUWAHATI 781001.

3:THE DIRECTORATE GENERAL OF GST INTELLIGENCE (DGGI) REPRESENTED BY ITS ADDITIONAL DIRECTOR GENERAL GUWAHATI ZONAL UNIT H.NO. 77 WARD NO. 54 OPPOSITE SRIMANTA SANKARDEVA KALAKSHETRA PANJABARI MAIN ROAD GUWAHATI 781037.

4:THE JOINT DIRECTOR DIRECTORATE GENERAL OF GST INTELLIGENCE (DGGI) GUWAHATI ZONAL UNIT H.NO. 77 WARD NO. 54 OPPOSITE SRIMANTA SANKARDEVA KALAKSHETRA PANJABARI MAIN ROAD

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GUWAHATI- 781037.

5:THE SENIOR INTELLIGENCE OFFICER DIRECTORATE GENERAL OF GST INTELLIGENCE (DGGI) GUWAHATI ZONAL UNIT H.NO. 77 WARD NO. 54 OPPOSITE SRIMANTA SANKARDEVA KALAKSHETRA PANJABARI MAIN ROAD GUWAHATI 781037.

6:THE STATE OF ASSAM REPRESENTED BY THE COMMISSIONER AND SECRETARY TO THE GOVERNMENT OF ASSAM DEPARTMENT OF FINANCE AND TAXATION DISPUR ASSAM.

7:THE PRINCIPAL COMMISSIONER STATE TAX KAR BHAWAN G.S. ROAD DISPUR GUWAHATI -781006.

8:THE BRANCH MANAGER HDFC BANK LILUAH BRANCH 268/9 G.T. ROAD NEAR MCKV SCHOOL LILUAH HOWRAH WEST BENGAL- 711204

Advocate for the Petitioner : MR. R S MISHRA, MS B SARMA,MS. M DEY Advocate for the Respondent : DY.S.G.I., SC, FINANCE AND TAXATION,SC, GST

Linked Case : WP(C)/4298/2026

SMT KAVITA MANDELIA WIFE OF SHRI ASHOK KUMAR MANDELIA RESIDENT OF FLAT NO. 4AB TOWER II EMPIRE BUILDING 16A GURUSADAY DUTTA ROAD KOLKATA WEST BENGAL- 700019

VERSUS

THE UNION OF INDIA AND 8 ORS REPRESENTED BY THE SECRETARY MINISTRY OF FINANCE DEPARTMENT OF REVENUE ROOM NO. 66 NORTH BLOCK

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NEW DELHI 110001.

2:THE PRINCIPAL COMMISSIONER CENTRAL GOODS AND SERVICE TAX CENTRAL EXCISE AND CUSTOMS 5TH FLOOR GST BHAWAN KEDAR ROAD MACHKHOWA GUWAHATI- 781001.

4:THE JOINT DIRECTOR DIRECTORATE GENERAL OF GST INTELLIGENCE (DGGI) GUWAHATI ZONAL UNIT H.NO. 77 WARD NO. 54 OPPOSITE SRIMANTA SANKARDEVA KALAKSHETRA PANJABARI MAIN ROAD GUWAHATI 781037.

5:THE SENIOR INTELLIGENCE OFFICER DIRECTORATE GENERAL OF GST INTELLIGENCE (DGGI) H.NO. 77 WARD NO. 54 OPPOSITE SRIMANTA SANKARDEVA KALAKSHETRA PANJABARI MAIN ROAD GUWAHATI 781037.

6:THE STATE OF ASSAM REPRESENTED BY THE COMMISSIONER AND SECRETARY TO THE GOVERNMENT OF ASSAM DEPARTMENT OF FINANCE AND TAXATION DISPUR ASSAM.

7:THE PRINCIPAL COMMISSIONER STATE TAX KAR BHAWAN G.S.ROAD DISPUR GUWAHATI- 781006

8:THE BRANCH MANAGER HDFC BANK LILUAH BRANCH 268/9 G.T. ROAD NEAR MCKV SCHOOL LILUAH HOWRAH

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WEST BENGAL- 711204

9:THE BRANCH MANAGER INDUSLND BANK STOCK EXCHANGE BRANCH GROUP FLOOR 1-INDIA EXCHANGE PLACE KOLKATA WEST BENGAL 700001 ------------ Advocate for : MR. R S MISHRA Advocate for : DY.S.G.I. appearing for THE UNION OF INDIA AND 8 ORS

Linked Case : WP(C)/4299/2026

SHRI ASHOK KUMAR MANDELIA SON OF LATE KISHANLAL MANDELIA RESIDENT OF FLAT NO. 4AB TOWER II EMPIRE BUILDING 16A GURUSADAY DUTTA ROAD KOLKATA WEST BENGAL- 700019.

VERSUS

THE UNION OF INDIA AND 7 ORS REPRESENTED BY THE SECRETARY TO THE GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE ROOM NO. 66 NORTH BLOCK NEW DELHI 110001.

2:THE PRINCIPAL COMMISSIONER CENTRAL GOODS AND SERVICE TAX CENTRAL EXCISE CUSTOMS 5TH FLOOR GST BHAWAN KEDAR ROAD MACHKHOWA GUWAHATI- 781001.

3:THE DIRECTORATE GENERAL OF GST INTELLIGENCE (DGGI) REPRESENTED BY ITS ADDITIONAL DIRECTOR GENERAL GUWAHATI ZONAL UNIT H. NO. 77 WARD NO. 54 OPPOSITE SRIMANTA SANKARDEVA KALAKSHETRA PANJABARI MAIN ROAD GUWAHATI 781037.

4:THE JOINT DIRECTOR DIRECTORATE GENERAL OF GST INTELLIGENCE (DGGI)

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GUWAHATI ZONAL UNIT H. NO. 77 WARD NO. 54 OPPOSITE SRIMANTA SANKARDEVA KALAKSHETRA PANJABARI MAIN ROAD GUWAHATI 781037.

5:THE SENIOR INTELLIGENCE OFFICER DIRECTORATE GENERAL OF GST INTELLIGENCE (DGGI) GUWAHATI ZONAL UNIT H. NO. 77 WARD NO. 54 OPPOSITE SRIMANTA SANKARDEVA KALAKSHETRA PANJABARI MAIN ROAD GUWAHATI 781037.

6:THE STATE OF ASSAM REPRESENTED BY THE COMMISSIONER AND SECRETARY TO THE GOVERNMENT OF ASSAM DEPARTMENT OF FINANCE AND TAXATION DISPUR ASSAM.

7:THE PRINCIPAL COMMISSIONER STATE TAX KAR BHAWAN G.S. ROAD DISPUR GUWAHATI- 781006.

8:THE BRANCH MANAGER HDFC BANK LILUAH BRANCH 268/9 G.T. ROAD NEAR MCKV SCHOOL LILUAH HOWRAH WEST BENGAL- 711204 ------------ Advocate for : MR. R S MISHRA Advocate for : DY.S.G.I. appearing for THE UNION OF INDIA AND 7 ORS

BEFORE HONOURABLE MR. JUSTICE MANISH CHOUDHURY ORDER Date : 31-08-2026

These three writ petitions, under Article 226 of the Constitution of India, involve similar issues, which is relatable to Section 83 of the Central Goods

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and Services Tax Act, 2017 [‘the CGST Act’, for short] and, therefore, all the three writ petitions are taken up together for consideration.

I have heard Mr. R.S. Mishra, learned counsel for the petitioner; Mr. S.

Chanda, learned Central Government Counsel for the respondent no. 1;

Mr. S.C. Keyal, learned Senior Counsel and Special Counsel, CGST for the respondent nos. 2 – 5; and Mr. B. Choudhury, learned Standing Counsel, Finance and Taxation Department for the respondent nos. 6 & 7.

Before dilation on the issue raised in these writ petitions, a brief narration of facts involving the writ petitions can be mentioned.

W.P.[C] no. 4286/2026 : It is the case of the petitioner that her Savings Bank Account no. 50100153873394 maintained at HDFC Bank Ltd., Howrah Liluah Branch, West Bengal has been kept blocked since 19.05.2022 by the respondent CGST authorities purportedly in exercise of powers under Section 83 CGST Act read with Rule 159 of the Central Goods and Services Tax Rules, 2017 [‘the CGST Rules’, for short]. The petitioner has stated that she was never served with any Order of Provisional Attachment in Form GST DRC-22. Aggrieved by such action on the part of the respondent CGST Authorities, the petitioner stated to have made a Detailed Representation dated 25.03.2026 [submitted on 24.04.2026] before the respondent no. 5, requesting revocation of freezing of her Bank Account.

However, no response was received from the end of the respondent no. 5 during the subsequent period. The petitioner again submitted a Representation dated 30.05.2026 [submitted on 11.06.2026], which was duly received by the respondent no. 5. But the respondent authorities were found to have maintained silence in the matter. The petitioner also submitted a Representation before the respondent no. 8 on 05.07.2026 with a request to furnish an Order, if any, containing the direction to keep the Savings Bank Account of the petitioner freezed. The petitioner has

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stated that after the afore-mentioned efforts, the petitioner is constrained to prefer the present writ petition seeking a direction to the respondent authorities to de-freeze the Savings Bank Account no. 50100153873394.

W.P.[C] no. 4298/2026 : It the case of the petitioner that the petitioner’s two Savings Bank Accounts – [i] Account no. 50100153956350 maintained at HDFC Bank Ltd., Liluah Branch, Howrah, West Bengal; and [ii] Account no. 159831958999 maintained at Indusind Bank, Stock Exchange Branch, Kolkata, West Bengal; have been kept blocked since 2022 by the respondent CGST authorities purportedly in exercise of powers under Section 83, CGST Act read with Rule 159 of the CGST Rules. The petitioner has stated that she was never served with any order of Provisional Attachment in Form GST DRC-22. Aggrieved by such action on the part of the respondent CGST Authorities, the petitioner stated to have made a Detailed Representation dated 25.03.2026 [submitted on 24.04.2026] before the respondent no. 5, requesting revocation of freezing of her Bank Accounts. However, no response was received from the end of the respondent no. 5 during the subsequent period. The petitioner again submitted a Representation dated 30.05.2026 [submitted on 11.06.2026], which was duly received by the respondent no. 5. But the respondent authorities were found to have maintained silence in the matter. The petitioner has stated that after the afore-mentioned efforts, the petitioner is constrained to prefer the present writ petition seeking a direction to the respondent authorities to de-freeze the Savings Bank Account no.

50100153873394.

W.P.[C] no. 4299/2026 : It the case of the petitioner that the petitioner’s Bank Account no. 50100153873355 maintained at HDFC Bank Ltd., Liluah Branch, Howrah, West Bengal has been kept blocked since 2022 by the respondent CGST authorities purportedly in exercise of powers under Section 83, CGST Act read with Rule 159 of the CGST Rules. The petitioner

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has stated that he was never served with any order of Provisional Attachment in Form GST DRC-22. Like the other two writ petitioners, he also submitted Representations, dated 25.03.2026 & dated 30.05.2026, before the respondent no. 5, which did not evoke any response.

The petitioners have stated that on the basis of intelligence gathered that the respondent authorities came to observe that certain registered tax payers were engaged in issuance of fake invoices without actual supply of goods and the registration of those tax payers got cancelled after operating for a short period of time, and upon perusal of the records available on E-Way portal, it was observed that those entities were supplying aluminium scrap, copper scrap, etc. to recipients situated at Kolkata, West Bengal during the period from February, 2022 to March, 2022. Based on the above inputs, inspections and searches were conducted at the registered premises of those entities and during the course of inspection and searches, none of those entities was found to have existed at their respective Principal Place of Business [PPoB] and they were declared as non-existent and fictitious. From the verification of GSTR- 2A, it was observed that there was no inward receipt of goods by those entities. But, on verification of GSTR-1, it was observed that they purportedly supplied aluminium scrap, copper scrap, etc. to three major recipients without actual supply of goods. On further analysis of the outward supply of those three recipients, it was observed that the major recipient of the said three recipients was M/s Salasar Exim Limited [GSTIN- 19AAICS8273N1ZF]. Accordingly, the PPoB along with the additional place of business and residential premises of the directors of M/s Salasar Exim Limited were searched. During the period from 13.05.2022 to 13.07.2022 panchnamas were accordingly prepared. Statements of key persons of M/s Salasar Exim Limited viz. Sri Shantosh Kumar Rai [staff], Sri Ashok Kumar Mandelia [major stakeholder], and Sri Ashish Kumar Mandelia [CEO - Erstwhile Director] were recorded under Section 70 of the CGST Act. On

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perusal of GSTR-2A of M/s Salasar Exim Limited and records available on GST Portal, it was observed that, during the period – Financial Year : 2018- 2019 to Financial Year : 2022-2023, it had received Input Tax Credit [ITC] amounting to Rs. 55,37,03,789/- from the suppliers whose GST registrations were cancelled due to fraud or non-existence etc. Based on these findings and other materials gathered in the course of investigation, it was made to appear that M/s Salasar Exim Limited had, during the period - Financial Year : 2018-2019 to Financial Year : 2022-2023, the Company had availed and utilized ITC on the strength of fake and bogus invoices without actual receipt of goods amounting to Rs. 106,08,52,703/- from fake/bogus suppliers and had also availed and utilized excess ITC [GSTR-2A vs. GSTR-3B] amounting to Rs. 3,37,02,595/-. On 25.06.2025, a Demand – cum – Show Cause Notice came to be served upon M/s Salasar Exim Limited and its CEO [Erstwhile Director], Sri Ashish Kumar Mandelia under Section 122 of the CGST Act and identical provisions of the West Bengal GST Act and IGST Act asking them to show cause as to why a penalty equivalent to ineligible ITC availed and utilized amounting to Rs.

109,45,55,298/- and a penalty equivalent to ineligible ITC passed on by issuing invoices without actual supply of goods amounting to Rs.

115,78,36,737/- should not be imposed under Section 122[1][vii] and Section 122[1][ii] respectively of the CGST Act read with identical provisions of the West Bengal GST Act and IGST Act.

From the contents of the Deman – cum – Show Cause Notice, it appears that Sri Ashish Kumar Mandelia was the CEO [Erstwhile Director] of M/s Salasar Exim Limited on 25.06.2025.

It has been averred by the writ petitioner in W.P.[C.] no. 4286/2026 that she is the wife of Sri Amar Kumar Mandelia, who is one of the Directors in M/s Salasar Exim Limited. It is stated that Sri Amar Kumar Mandelia is involved in the business operation of M/s Salasar Exim Limited.

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9.1.

The writ petitioner in the writ petition, W.P.[C.] no. 4298/2026 has stated that Sri Ashish Kumar Mandelia and Sri Amar Kumar Mandelia are her sons and she had never received any summon or notice at any point of time.

9.2.

It has been averred by the writ petitioner in W.P.[C.] no. 4299/2026 that Sri Ashish Kumar Mandelia and Sri Amar Kumar Mandelia are his sons. He has stated that he is only a shareholder in M/s Salasar Exim Limited and has no role in its business operations. He has stated that he had received a summon under Section 70, CGST Act from the respondent no. 5 and his statement was recorded on his appearance pursuant to receipt of the summons.

10.

It is stated that the proceeding initiated against M/s Salasar Exim Limited and one Sri Ashish Kumar Mandelia who is the Chief Executive Officer, erstwhile Director of M/s Salasar Exim Ltd, was the reason behind the blocking of the Bank Accounts. As mentioned above, the proceedings so initiated resulted in issuance of a Demand – cum – Show Cause Notice under Section 122 of the CGST Act on 25.06.2025 and the present petitioners are not noticees/recipients of the Demand – cum – Show Cause Notice dated 25.06.2025.

11.

It is stated that a proceeding was initiated against M/s Salasar Exim Ltd.

and one Sri Ashish Kumar Mandelia who is the Chief Executive Officer, erstwhile Director of M/s Salasar Exim Ltd. The petitioner is the wife of one Sri Amar Kumar Mandelia who is also a Director in M/s Salasar Exim Ltd.

The proceeding so initiated resulted in issuance of a Demand cum Show Cause Notice under Section 122 of the CGST Act on 25.06.2025 and the present petitioner is not a noticee/recipient of the Demand cum Show Cause Notice dated 25.06.2025. It is stated that without service of notice in Form GST DRC-22, the Bank Account of the petitioner has been kept

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blocked since 19.05.2022 till date purportedly under Section 83 of the CGST Act.

12.

The contention advanced by Mr. Mishra, learned counsel for the petitioners in all these writ petitions is that after an Order is passed under sub-section [1] of Section 83 of the CGST Act read with Rule 159 of the CGST Rules for provisional attachment on any property, including Bank Account, upon initiation of any proceedings, mentioned therein, an Order of Provisional Attachment, by virtue of sub-section [2] of Section 83, CGST Act read with Rule 159 of the CGST Rules ceases to have effect after a period of one year from the date of the Order passed under sub-section [1] of Section 83. He has further submitted that it is a mandate under Rule 159 of the CGST Rule for the Commissioner to pass an order in Form GST DRC-22 if it is decided by the Commissioner to attach any property. He has further submitted that a provisional attachment order can be passed in respect of any property, including Bank Account belonging to the taxable person or any person specified in sub-section 1A of Section 122 of the CGST Act.

12.1. In the cases in hand, a search was carried out in the PPoB along with the additional place of business of M/s Salasar Exim Ltd. bearing GSTIN 19AAIC58273N1ZF, and the residential premises of the Directors of M/s Salasar Exim Ltd. from 13.05.2022 onwards. During the course of investigation under Section 70 of the CGST Act, statements of a number of persons were recorded. It is in course of such investigation, the Bank Accounts maintained by these petitioners came to be provisionally attached on 19.05.2022. Therefore, on and from 19.05.2023, the Provisional Orders of Attachment ought to have ceased effect. But, the petitioners were prevented from operating their respective personal Bank Accounts till date, which is contrary to the provisions of the CGST Act and the CGST Rules.

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12.2. Mr. Mishra has pointed out that the investigation so initiated resulted in issuance of a Demand – cum – Show Cause Notice dated 25.06.2025 under Section 122 of the CGST Act to M/s Salasar Exim Ltd. and its CEO, Sri Ashish Kumar Mandelia. It is submitted that such Demand cum Show Cause Notice has not been issued to the petitioners in these three writ petitions.

13.

Mr. Keyal, learned Senior Counsel & Special Counsel, CGST has submitted that during the proceedings initiated against M/s Salasar Exim Limited it was noticed that there were amounts which were transferred from the Account of M/s Salasar Exim Limited to the Accounts of its Directors as well as their relatives. It was in order to protect the interests of revenue and in exercise of power conferred under Section 83 of the CGST Act, Provisional Orders of Attachment were passed by the Competent Authority on 19.05.2022 and 23.05.2022 respectively. He has submitted that contrary to the contention made on behalf of the petitioners, the Orders of Provisional Attachment were passed in Form GST DRC-22. He has placed two Orders of Provisional Attachment, dated 19.05.2022 & dated 23.05.2022, issued in Form GST DRC-22 before this Court.

14.

In order to appreciate the contentions of the parties, it appears appropriate to refer to the provisions of Section 83 of the CGST Act and Rule 159 of the CGST Rules. They are referred hereinbelow for ready reference :-

Section 83. Provisional attachment to protect revenue in certain cases.

[1] Where during the pendency of any proceedings under Section 62 or Section 63 or Section 64 or Section 67 or Section

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73 or Section 74, 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 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].

Rule 159. Provisional attachment of property . – [1] Where the Commissioner decides to attach any property, including bank account in accordance with the provisions of section 83, he shall pass an order in FORM GST DRC-22 to that effect mentioning therein, the details of property which is attached.

[2] The Commissioner shall send a copy of the order of attachment [in FORM GST DRC-22 ] to the concerned Revenue Authority or Transport Authority or any such Authority to place encumbrance on the said movable or immovable property, which shall be removed only on the written instructions from the Commissioner to that effect.

[3] Where the property attached is of perishable or hazardous nature, [and if the person, whose property has been attached] pays an amount equivalent to the market price of such property or the amount that is or may become payable [by such person], whichever is lower, then such property shall be released forthwith, by an order in FORM GST DRC-23, on proof of payment.

[4] Where [such person] fails to pay the amount referred to in sub-rule [3] in respect of the said property of perishable or hazardous nature, the Commissioner may dispose of such

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property and the amount realized thereby shall be adjusted against the tax, interest, penalty, fee or any other amount payable [such person].

[5] Any person whose property is attached may [file an objection in FORM GST DRC-22A ] to the effect that the property attached was or is Not liable to attachment, and the Commissioner may, after affording an opportunity of being heard to the person filing the objection, release the said property by an order in FORM GST DRC- 23 .

[6] The Commissioner may, upon being satisfied that the property was, or is No longer liable for attachment, release such property by issuing an order in FORM GST DRC- 23.

15.

In Radha Krishan Industries vs. State of Himachal Pradesh and others, [2021] 6 SCC 771, the provision contained in Section 83 of the Himachal Pradesh Goods and Services Tax [HP GST] Act, 2017 came to be examined. The provision of Section 83 of the HP GST Act is similarly worded like Section 83 of the CGST Act.

15.1. Taking note of the Parliamentary intent from the marginal note to Section 83, it has been noted that the attachment is provisional – provisional in the sense that it is in aid of something else and the purpose is to protect the revenue. Bifurcating sub-section [1] of Section 83 into several parts, it has been noted that the first part has provided an insight on when in point of time or at which stage, the power to attach provisionally can be exercised.

The second part has specified the authority to whom the power to order a provisional attachment is entrusted. The third part defines the conditions which must be fulfilled to validate the power or ordering a provisional attachment. The fourth part indicates the manner in which an attachment is to be leveled. The final and the fifth part defines the nature of the

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property which can be attached. Explaining further, it has been observed as under :-

41.1. The power to order a provisional attachment is entrusted during the pendency of proceedings under any one of six specified provisions : Sections 62, 63, 64, 67, 73 or 74. In other words, it is when a proceeding under any of these provisions is pending that a provisional attachment can be ordered.

41.2. The power to order a provisional attachment has been vested by the legislature in the Commissioner.

41.3. Before exercising the power, the Commissioner must be “of the opinion that for the purpose of protecting the interest of the government revenue, it is necessary so to do”.

41.4. The order for attachment must be in writing.

41.5. The provisional attachment which is contemplated is of any property including a bank account belonging to the taxable person.

41.6. The manner in which a provisional attachment is levied must be specified in the rules made pursuant to the provisions of the statute.

42.

Under sub-section (2) of Section 83, a provisional attachment ceases to have effect upon the expiry of a period of one year of the order being passed under sub-section (1). The power to levy a provisional attachment has been entrusted to the Commissioner during the pendency of proceedings under Sections 62, 63, 64, 67, 73 or as the case may be, Section 74.

Section 62 contains provisions for assessment for non-filing of returns. Section 63 provides for assessment of unregistered persons. Section 64 contains provisions for summary

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assessment. Section 67 elucidates provisions for inspection, search and seizure.

15.2. It has been held that the power to levy a provisional attachment is draconian in nature. By the exercise of the power, a property belonging to the taxable person may be attached, including a bank account. The attachment is provisional and the statute has contemplated an attachment during the pendency of the proceedings under the stipulated statutory provisions. An attachment which is contemplated in Section 63 is at a stage which is anterior to the finalization of an assessment or the raising of a demand. A provisional attachment under Section 83 is contemplated during the pendency of certain proceedings, meaning thereby that a final demand or liability is yet to be crystalized. Section 83 required that there must be pendency of proceedings under the relevant provisions against the taxable person whose property is sought to be attached.

16.

In Keshari Nandan Mobile vs. Office of Assistant Commissioner of State Tax [2], Enforcement Division – 5, [2026] 5 SCC 461, the provisional attachment orders were issued on 13.11.2024 and 18.12.2024 respectively in purported exercise of power conferred by Section 83 of the CGST Act. Prior to issuance of those impugned provisional attachment orders, the respondent had issued Provisional Attachment Orders on 17.10.2023 and 26.10.2023 respectively. It was contended that in terms of sub-section [2] of Section 83 of the CGST Act, the Provisional Attachment Orders dated 17.10.2023 and 26.10.2023 lapsed upon expiry of a year;

and that despite having no jurisdiction conferred by law, the respondent proceeded to pass fresh Attachment Orders dated 13.11.2024 and dated 18.12.2024 respectively, terming them as renewal of the earlier Orders.

The question of law arose for decision was : whether the CGST Act or any other law permits issuance of a second Provisional Attachment Order under sub-section [1] of Section 83 of the CGST Act after the initial Provisional

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Attachment Order issued thereunder ceases, by reason of efflux of a year from the date of its issuance, in terms of sub-section [2] thereof.

16.1. Endorsing the view in Radha Krishan Industries [supra] in so far as sub- section [1] of Section 83 is concerned, the Hon’ble Court has observed that a proper interpretation of sub-section [2] would necessarily involve considering the severe or stringent nature of power conferred by sub- section [1]. It has been observed to the effect that a plane reading of sub- section [2] of Section 83 would leave none in doubt that any Order of Provisional Attachment, issued under sub-section [1], would cease to have any effect after a period of a year. The provision does not require employment of other interpretation, rules beyond a literal interpretation to understand it. Answering the question, the Hon’ble Court, has observed, having regard to the draconian nature of power conferred on the revenue by sub-section [1] of Section 83 of the CGST Act to levy a provisional attachment, that the terms of the entire section have to be construed in a manner so that sub-section [2] of Section 83 is not effectively reduced to a dead letter. Conceding power to the revenue to issue a fresh provisional order of attachment after initial order has lapsed by operation of law or to renew the same would render the text of sub-section [2] of Section 83 otiose and has held that Section 83 does not confer any additional power over and above the draconian power conferred by sub-section [1] and upon lapse as ordained by sub-section [2]. It is observed that the provisional attachment is a pre-emptive measure to protect the interest of Government revenue. It cannot function as a recovery measure; for that, the statute has other provisions. A period of one year, as ordained by the legislature, is enough for the revenue authorities to conclude its investigation; if not, the legislature could have provided for a renewal or an extended period. It has been held that sub-section [2] of Section 83 does not provide for any exception. Once the enquiry culminates into a final demand, recourse must be had to the appropriate provisions under the

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Statute which provide for recovery of the assessed tax, penalty, interest, etc. It has been held that the respondent could not have issued the impugned provisional attachment Orders dated 30.11.2024 and 18.12.2024 upon the previous ones having ceased to have any effect by operation of law after a year of their issuance. The Bank Accounts attached by the respondent were held to have been de-freezed.

17.

In the light of the above, it is appropriate to refer to the contents of the two provisional attachment Orders, passed on 19.05.2022 and 23.05.2022, in respect of the Bank Accounts of the petitioners.

17.1. The following are the relevant excerpts from the provisional attachment Order dated 19.05.2022, whereby the three Bank Accounts of the petitioners were attached :-

FOR GST DRC – 22 [See rule 159(1)] E.No.:DGGI/INT/INTL/581/2022-Gr D-O/o ADG-DGGI-ZU-GUWAHATI

To, The Branch Manager, No 268/9, GT Road, Liluah, Howrah-711204, [Bank/Post Office/Financial Institution/Immovable property registering authority]

Provisional attachment of property under Section 83 It is to inform that M/s Salasar Exim Ltd. having principal place of business at 222, Girish Ghosh Road, Belurmath, Howrah, West Bengal, 711202 bearing GST registration number as 19AA1CS8273N1ZF, PAN – AA1CS8273N is a registered taxable person under the CGST/SGST/IGST Act, 2017. Proceedings have been launched against the aforesaid taxable person under Section 83 of the said Act to determine the tax or any other amount due from the

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said person. As per information available with the department, it has come to my notice that the said M/s Salasar Exim Ltd. [GSTIN-19AA1CS8273N1ZF] has the following bank accounts -

Sl.

Bank Account No.

Type of Account Bank Name Branch Name 1 50200017403504 Current HDFC Howrah Liluah 2 50200018500476 Current HDFC Howrah Liluah 3.

50300150686920 Fixed Deposit HDFC Howrah Liluah

Also, it has come to my Notice that there are amounts transferred from the Company’s account to the accounts of the Directors as well as their relatives. The details of such accounts are as below –

Sl..

Name of the Account holder Account No.

Bank Name and Branch Relation with Salasar Exim Ltd.

1 X X X X X X X X X X X X X X X Director of the Company 2 X X X X X X X X X X X X X X X Director of the Company 3 Ashok Kumar Mandelia 50100153873355 HDFC, Howrah Liluah Father of the Directors of the Company 4 Kavita Mandelia 50100153956350 HDFC, Howrah Liluah Mother of the Directors of the Company 5 Ritu Mandelia 50100153873394 HDFC, Howrah Liluah Wife of Amar Kumar Mandelia, Director

In order to protect the interests of revenue and in exercise of the powers conferred under Section 83 of the Act, I, XXX, Additional Director General, Directorate General of GST Intelligence, Guwahati Zonal Unit, H.No. 77, Ward No. 54, Opposite Srimanta Shankardeva Kalakshetra, Panjabari Main Road, P.O. Panjabari, Guwahati, Assam – 781037 hereby provisionally attach the aforesaid accounts.

No debit shall be allowed to be made from the said accounts or any other account operated by the aforesaid persons on the same PAN without the prior permission of this department.

[XXX]

ADDITIONAL DIRECTOR GENERAL

17.2. The following are the relevant excerpts from the provisional attachment Order dated 23.05.2022, whereby one of the two Bank Accounts of the petitioner in the writ petition, W.P.[C.] no. 4298/2026 was attached :-

Page No. #20/21

FOR GST DRC – 22 [See rule 159(1)] E.No.:DGGI/INT/INTL/581/2022-Gr D-O/o ADG-DGGI-ZU-GUWAHATI

To, The Branch Manager, IndusInd Bank Ltd., G.S.Road, Bhangagarh, Above Bata Showroom, Guwahati - 781005

Sl.

Name of the Account holder Account No.

Bank Name and Branch Relation with Salasar Exim Ltd.

1 X X X X X X X X X X X X X X X Director of the Company 2 Kavita Mandelia 159831958999 IndusInd Bank, India Exchange Place, Kolkata Mother of the Directors of the Company

No debit shall be allowed to be made from the said accounts or any other account operated by the aforesaid persons on the same PAN without the prior permission of this department.

[XXX]

Page No. #21/21

ADDITIONAL DIRECTOR GENERAL

18.

In response to a query made to the learned Senior Counsel & Special Counsel, CGST as to whether there were any subsequent provisional orders of attachment of the afore-mentioned Bank Accounts, during the one year currency of the afore-mentioned provisional orders of attachment, or after expiry of one year of the respective dates of issuance of the above two provisional orders of attachment, he has answered in the negative.

19.

Going by the provisions of sub-section [2] of Section 83 of the CGST Act, it is evident that the provisional orders of attachment dated 19.05.2022 and dated 23.05.2022, whereby the afore-mentioned Bank Accounts of these three petitioners were provisionally attached, have ceased to have effect after 19.05.2023 and 23.05.2023 respectively. With the Demand – cum – Show Cause Notice dated 25.06.2025 not issued to any of these petitioners, there is no reason to prevent the petitioners from operating the afore-mentioned four Bank Accounts. Therefore, it is to be observed that the afore-mentioned Bank Accounts maintained by the three petitioners herein, which were provisionally attached on 19.05.2022 and 23.05.2022 by the respondent authorities, shall stand de-freezed. It is accordingly observed. Consequently, they are to be made operable forthwith upon submission of a certified copy of this Order by the petitioners before the respective Banks where they have been maintaining those Bank Accounts.

20.

The three writ petitions stand allowed to the extent indicated above. There is, however, no order as to cost.

JUDGE Comparing Assistant