C Kluster Expotrade PVT. LTD. vs. The Principal Additional Director General Of GST Intelligence And Ors

Held

The Court held that the order of provisional attachment dated 1 February 2021 would, by deeming fiction, stand lapsed after a period of one year. The reasoning was based on the concession made by the respondents that the attachment lapses by statutory operation after one year. The ratio decidendi is that a provisional attachment order under Section 83(1) of the CGST Act has a statutory life of one year and lapses thereafter unless a fresh order is passed. The Court disposed of the writ petitions with the observation that if a fresh provisional attachment order has been issued, the parties are at liberty to take appropriate steps. The Court also directed that the Respondent-Authority shall decide upon any application/representation made by the Petitioners regarding export incentives blocked by the Customs Department, preferably within four weeks from the date of the application.

Facts

The petitioners, C. Kluster Exportrade Pvt. Ltd. and others, filed writ petitions challenging an order of provisional attachment of their bank accounts. This attachment was purportedly made under Section 83(1) of the CGST Act. The order of provisional attachment was dated 1 February 2021. The petitioners argued that such an order cannot remain in effect beyond one year. The respondents, represented by the Principal Additional Director General of GST Intelligence, acknowledged that by statutory operation, the provisional attachment would lapse after one year. They also informed the court that a fresh order of provisional attachment had been passed.

Key Issues

1. Whether an order of provisional attachment of a bank account passed under Section 83(1) of the CGST Act is valid beyond a period of one year? Petitioner's contention: The petitioners argued that the order of provisional attachment, dated 1 February 2021, cannot remain in force beyond one year from its date of issue, citing the statutory limitation. Respondent's contention: The respondents conceded that by operation of the statute, the provisional attachment order stands lapsed after one year. They further submitted that a fresh order of provisional attachment had been passed.