M/S. Rakesh Enterprises vs. The Principal Commissioner,Central Goods And Services Tax & Anr.

Facts

The petitioner, M/s. Rakesh Enterprises, filed a writ petition before the Delhi High Court challenging an order dated January 3, 2020, passed by the Principal Commissioner (CGST), Delhi North. This order provisionally attached the petitioner's current bank account with ICICI Bank Ltd. The attachment was made under Section 83(1) of the Central Goods and Services Tax Act, 2017. The respondents, represented by the Principal Commissioner, stated that although a counter affidavit had been filed, it was not on record. They further submitted that over a year had passed since the provisional attachment order, and under Section 83(2) of the CGST Act, such attachments cease to have effect after one year.

Held

The Court held that the provisional attachment order dated January 3, 2020, was no longer operative. This decision was based on the submission by the respondents that the attachment under Section 83(1) of the CGST Act, 2017, ceases to have effect after the expiry of one year, as stipulated in Section 83(2) of the Act. The Court found that more than one year had elapsed since the order of attachment. Consequently, the Court allowed the petition. The operative direction was that if the operations of the bank account were restricted solely due to the aforementioned attachment order, the concerned bank, ICICI Bank Ltd., was directed to permit the petitioner to operate its account on the strength of this High Court order. No issues were expressly left undecided.

Key Issues

1. Whether the provisional attachment of the petitioner's bank account under Section 83(1) of the Central Goods and Services Tax Act, 2017, remains operative after the expiry of one year from the date of the order. The petitioner argued that the attachment order was no longer valid due to the lapse of time. The respondents conceded that the attachment order, issued on January 3, 2020, would have ceased to have effect after one year, as per Section 83(2) of the CGST Act, and submitted that an appropriate order be passed. No other arguments were recorded for either side.