M/S.Leon Infrabuild Private Limited And Ors. vs. Union Of INDIA And Ors.

Held

The Court held that the impugned order of attachment of the petitioner's DEMAT account, passed under Section 83 of the CGST Act, had lost its force and could no longer be continued. The reasoning was based on the admitted fact that the maximum period of continuation of such an attachment order, which is one year, had expired. The Court declared that the order had lost its force and could not be continued anymore. As a consequence of this declaration, all legal consequences would follow automatically. The Court disposed of the writ petition with this declaration.

Facts

The petitioners, M/s. Leon Infrabuild Private Limited & Anr., filed a writ petition challenging an order of attachment of their DEMAT account. This order was passed on March 1, 2021, under Section 83 of the Central Goods and Services Tax (CGST) Act, 2017. The petitioners contended that the maximum period for the continuation of an attachment order under Section 83 of the Act is one year, and this period had already expired. The respondents, the Union of India and CGST Authorities, did not deny this fact. The writ petition was filed before the High Court.

Key Issues

1. Whether the order of attachment of the petitioner's DEMAT account, passed under Section 83 of the CGST Act, 2017, has lost its force due to the expiry of its maximum continuation period. Petitioners' contention: The petitioners argued that the maximum period for which an attachment order under Section 83 of the CGST Act can remain in force is one year. They asserted that this one-year period had expired, rendering the impugned order invalid and unenforceable. They relied on the statutory provision of Section 83 of the CGST Act. Revenue's contention: The learned advocate representing the respondents (CGST Authorities) admitted that the maximum period of continuation of the attachment order had expired.