M/S Mridul Tobie Inc. vs. The Commissioner, C.G.S.T. And 2 Others

Held

The Court held that the communication dated May 11, 2020, which initiated the provisional attachment of the petitioner's bank account, had "outlived its life and perhaps its utility." The Court found no contrary legal position or evidence of further action by the respondent authorities to justify the continuation of the attachment. Consequently, the Court disposed of the writ petition with the observation that the provisional attachment under the said communication may not survive. The Court directed the bank to act accordingly and not treat the petitioner's bank account as being under provisional attachment by the revenue authorities based on the May 11, 2020 communication. The specific duration for which the attachment was valid or the exact legal provision limiting its duration was not explicitly detailed, but the finding was based on the passage of time and lack of further action.

Facts

The petitioner, M/s Mridul Tobie Inc., filed a writ petition challenging the provisional attachment of its bank account held with ICICI Bank Ltd. The attachment was carried out by the respondent-revenue authorities, specifically the Assistant Commissioner (A.E.), Central Tax, Gautam Budh Nagar, on May 11, 2020. This action was taken under Rule 129(1) of the CGST Rules, 2017, read with Section 83 of the CGST Act, 2017. The petitioner's primary contention was that, irrespective of the merits of the attachment, the revenue authorities were no longer legally entitled to continue the attachment beyond May 10, 2021, due to the operation of law. The court noted that no contrary legal position or further action by the revenue authorities was demonstrated.

Key Issues

1. Whether the provisional attachment of the petitioner's bank account, initiated on May 11, 2020, under Rule 129(1) of the CGST Rules, 2017, read with Section 83 of the CGST Act, 2017, remains valid and enforceable beyond May 10, 2021, in the absence of any further action by the revenue authorities. Petitioner's contention: The petitioner argued that the provisional attachment order had expired by operation of law and was no longer valid after May 10, 2021. They asserted that the revenue authorities were not entitled to continue the attachment beyond this date. The petitioner relied on the principle that such attachments have a limited lifespan unless extended or superseded by further legal action. Revenue's contention: The judgment records no specific argument or contention from the revenue authorities regarding the validity or continuation of the attachment beyond the stated period.