M/S Global Enterprises vs. Commissioner Central Goods And Service Tax, Delhi East & Anr.

Facts

The petitioner, M/s Global Enterprises, filed a writ petition challenging an order dated 26.03.2021, passed by the Commissioner, Central Goods and Service Tax and Central Excise (CGST and CX), Delhi East. This order froze the petitioner's current account with Axis Bank. This was the second instance of the petitioner's account being frozen; a prior provisional attachment order dated 19.05.2020 had been quashed by the same High Court on 22.03.2021. The petitioner contended that a fresh order was passed immediately after the previous one was quashed. The petitioner further stated that proceedings under Section 74 of the CGST Act were no longer pending, as an adjudication order was passed on 08.09.2021, against which an appeal had been filed, with 10% of the demanded tax deposited.

Held

The Court held that the impugned order dated 26.03.2021, which was a provisional attachment under Section 83 of the CGST Act, had lost its efficacy. The reasoning was based on Section 83(2) of the CGST Act, which mandates that every such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the order. Since the impugned order was dated 26.03.2021, and the Court was hearing the matter after the expiry of one year from that date, the attachment was no longer valid. The Court found that the attachment should stand lifted. The writ petition was disposed of in terms of this finding, with directions for the order to be communicated to the petitioner and the bank where the account was maintained.

Key Issues

1. Whether the impugned order dated 26.03.2021, passed under Section 83 of the CGST Act, has lost its efficacy due to the expiry of the one-year period stipulated in Section 83(2) of the CGST Act. Petitioner's arguments: The petitioner argued that the impugned order, which was a provisional attachment, could not remain effective beyond one year from its date of issue, as per Section 83(2) of the CGST Act. They also asserted that the underlying proceedings under Section 74 of the CGST Act had concluded with the passing of an adjudication order and the filing of an appeal, rendering the provisional attachment unnecessary. Revenue's arguments: The judgment records no specific arguments made by the revenue or the respondents.