S Z Trading And Impex PVT. LTD. vs. Commissioner Of CGST, Delhi (East) & Anr.

Facts

The petitioner, S Z Trading and Impex Pvt. Ltd., filed a writ petition before the Delhi High Court seeking a direction to unfreeze its bank account maintained with SBI Bank, Shahdara, Delhi. The petitioner contended that its bank account was provisionally attached by the Commissioner of CGST, Delhi (East) under Section 83 of the CGST Act, 2017, sometime in the year 2020-2021. The petitioner claimed it never received a copy of the provisional attachment order or any communication regarding it. The revenue, represented by the Commissioner of CGST, Delhi (East), pointed out that any order of attachment under Section 83(1) passed in 2020-21 would have lapsed by virtue of Section 83(2) of the CGST Act, 2017, as it cannot remain operative beyond one year from its issuance.

Held

The Court held that a provisional attachment order passed under Section 83(1) of the CGST Act, 2017, ceases to be operative after the expiry of one year from the date it is issued, as per Section 83(2) of the CGST Act, 2017. The Court noted that the petitioner claimed its bank account was attached in 2020-2021 and that the order had not been removed or revived. Therefore, based on the petitioner's assertion and the statutory provision, the Court concluded that the attachment order, if issued in 2020-21, would be inoperative. The Court directed the respondent bank not to interdict the operation of the petitioner's bank accounts solely on the basis of any Section 83(1) order passed in 2020-21, clarifying this was on the assumption that no further orders had been passed thereafter. The decision was based solely on the expiry of the attachment period under Section 83(2).

Key Issues

1. Whether a provisional attachment order issued under Section 83(1) of the Central Goods and Services Tax Act, 2017 (CGST Act, 2017) in the year 2020-2021 remains operative beyond one year from its date of issue, in light of Section 83(2) of the CGST Act, 2017? Petitioner's Contention: The petitioner argued that its bank account was frozen based on a provisional attachment order issued in 2020-2021 and that it never received this order. It sought the defreezing of its account. Revenue's Contention: The respondent revenue authority argued that any provisional attachment order issued in 2020-2021 would have automatically lapsed by operation of law under Section 83(2) of the CGST Act, 2017, as it cannot remain in force for more than one year from its issuance. The revenue did not dispute the petitioner's claim regarding the lapse of the order.