P.S. Trading Co. vs. Commissioner Of CGST, Delhi (East) & Anr.

Facts

The petitioner, P.S. Trading Co., filed a writ petition before the Delhi High Court challenging an order dated January 20, 2021, passed by the Commissioner of CGST, Delhi (East). This order provisionally attached the petitioner's vehicle, bearing registration number DL 14 CD 5858, under Section 83 of the Central Goods and Services Tax Act, 2017. The petitioner contended that the attachment order was no longer operative as more than one year had elapsed since its issuance, as stipulated by Section 83(2) of the CGST Act, 2017. The petitioner also stated that no other attachment order had been passed concerning the vehicle. The revenue, represented by the Commissioner of CGST, Delhi (East), acknowledged that the impugned order had ceased to be operative.

Held

The Court held that the provisional attachment of the petitioner's vehicle, made pursuant to the order dated January 20, 2021, had ceased to be operative. This finding was based on the petitioner's contention and the respondent's fair submission that Section 83(2) of the CGST Act, 2017, limits the validity of a provisional attachment order to one year from its date. The Court reasoned that since the impugned order was passed on January 20, 2021, and more than one year had elapsed, the attachment was no longer in effect. The ratio decidendi is that a provisional attachment under Section 83 of the CGST Act, 2017, automatically lapses upon the expiry of one year, unless extended or superseded by a subsequent order. The Court directed the respondent to treat the provisional attachment as non-operative and to ensure that the records reflect this. The Court clarified that this direction does not preclude the respondent from taking other measures if warranted by any other order or circumstances.

Key Issues

1. Whether the provisional attachment of the petitioner's vehicle, made pursuant to the order dated January 20, 2021, under Section 83 of the CGST Act, 2017, remains operative after the expiry of one year from the date of the order? Petitioner's contention: The petitioner argued that Section 83(2) of the CGST Act, 2017, explicitly states that a provisional attachment shall cease to have effect after the expiry of one year from the date of the order. Therefore, the attachment order dated January 20, 2021, is no longer valid. Revenue's contention: The respondent (Commissioner of CGST, Delhi (East)) conceded that the impugned order had ceased to be operative by virtue of Section 83(2) of the CGST Act, 2017.