Shri Adabala Naryana Rao S/O Shri Narsimha Rao vs. Union Of INDIA

Held

The Court held that while Rule 159(5) of the CGST Rules, 2017, does not explicitly prescribe a time limit for deciding objections to provisional attachments, such objections must be decided within a reasonable time. The Court noted that two months had passed since the petitioner filed his objection, and keeping it pending indefinitely would frustrate the purpose of the provision. The Court determined that an outer limit of three months from the date of submission of objections would be reasonable. Accordingly, Respondent No. 2 was directed to decide the petitioner's objection, after affording an opportunity of being heard, within one month from the date of the order. The Court also suggested that the respondents should issue a circular, if not already done, prescribing a time limit for deciding such objections to prevent the provisions from becoming a mere formality, especially considering the one-year maximum period for provisional attachment under Section 83 of the CGST Act, 2017.

Facts

The petitioner, proprietor of M/s ANR Freshworld, filed a writ petition challenging the provisional attachment of his bank account under Section 83 of the CGST Act, 2017, read with Rule 159 of the CGST Rules, 2017. The order of attachment (FORM GST DRC-22) was communicated to the petitioner through his bank. Upon learning of the order, the petitioner submitted an objection under Rule 159(5) of the CGST Rules, 2017, on July 5, 2024. However, this objection remained undecided. The petitioner contended that objections to provisional attachments must be decided within a reasonable time and not indefinitely.

Key Issues

1. Whether the objection filed by the petitioner under Rule 159(5) of the CGST Rules, 2017, against the provisional attachment of his bank account is required to be decided within a reasonable time? (Question of law) Petitioner's Arguments: - The petitioner argued that an objection to a provisional attachment, as provided under Rule 159(5) of the CGST Rules, 2017, must be decided within a reasonable time and cannot be kept pending indefinitely. The petitioner relied on the spirit of Rule 159(5) which envisages consideration of objections. Revenue's Arguments: - Respondent No. 2 (Directorate of GST Intelligence) submitted that the petitioner's objection would be decided as expeditiously as possible. No specific arguments were made regarding the time limit for deciding objections, other than a commitment to expedite.