M/S. Guru Nanak Motor House Through Proprietor Shri. Charan Singh Surjit Singh Gujral vs. Union Of INDIA Through The Secretary Ministry Of Law And Justice, Dept. Of Legal Affairs, And Ors.

Held

The Court held that the provisional attachment order of the petitioner's bank account, issued on May 8, 2019, ceases to have effect by operation of law. This decision is based on the clear mandate of Section 83(2) of the CGST Act, 2017, which states 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 made under sub-section (1). Since the period of one year from May 8, 2019, had expired and the attachment had not been lifted, the Court found it to be operative beyond the statutory limit. The ratio decidendi is that statutory provisions prescribing the duration of an order, like Section 83(2), must be strictly adhered to, and any continuation beyond that period is invalid. The Court directed the Joint Commissioner to immediately communicate to the petitioner's banker that the attachment order ceases to be operative and that the petitioner may be permitted to operate the bank account. This communication was to be completed within seven days. The Court also noted that prayer clause (c) regarding the appeal would be decided on its merits.

Facts

The petitioner, M/s. Guru Nanak Motor House, had its bank account provisionally attached by the Joint Commissioner (Anti-Evasion) CGST & CX, Belapur, on May 8, 2019. This action was taken under Section 83(1) of the CGST Act, 2017, read with Rule 159(1) of the CGST Rules, 2017, pending proceedings initiated under Section 67 of the CGST Act. The petitioner filed a writ petition challenging the continued attachment. It was not disputed that a period of one year from the date of the attachment order had expired. The petitioner sought relief primarily on the ground that the attachment order ceases to exist by operation of law.

Key Issues

1. Whether the provisional attachment order of the petitioner's bank account, issued under Section 83(1) of the CGST Act, 2017, ceases to have effect by operation of law upon the expiry of one year from the date of the order, as stipulated in Section 83(2) of the CGST Act? The petitioner argued that Section 83(2) of the CGST Act mandates that a provisional attachment shall cease to have effect after the expiry of one year from the date of the order. Therefore, the continued attachment of its bank account beyond this period is illegal and should be lifted. The respondents, represented by Mr. Pradeep Jetly, Senior Advocate, were unable to controvert the factual position that the one-year period from the date of attachment had expired. No specific arguments were recorded for the respondents regarding the validity of the continued attachment beyond the statutory period.