Mavaiya Enterprises PVT. LTD. vs. Union Of INDIA

Held

The Court noted that the revenue had fairly admitted that the one-year period for provisional attachment had expired for seven out of the nine bank accounts. This was further corroborated by an email from the CGST Preventive Section, Gandhinagar, confirming that the provisional attachments had ceased to have effect after the expiry of one year from the date of the DRC-22 order (08.10.2021), as per Section 83(2) of the CGST Act, 2017. The Court accepted this submission. Regarding the grievance that banks had not been intimated, the revenue assured the Court that the concerned banks would be intimated within one week from the date of the order to enable the operation of the bank accounts by the petitioners. The Court also acknowledged that fresh attachment orders had been passed for the remaining two bank accounts, which would give the petitioners a fresh cause of action in accordance with the law if they wished to challenge them. All petitions were disposed of based on these observations and directions.

Facts

The petitioners, including Panaqua Tradecom Private Limited, filed writ petitions before the Gujarat High Court challenging provisional attachment orders of their bank accounts issued by the Commissioner of CGST and Central Excise, Ahmedabad, under Section 83 of the Central Goods and Services Tax Act, 2017. The orders, dated 11.3.2021 and 12.10.2021, attached nine bank accounts in total. The petitioners also challenged the rejection of their representations to have the accounts unfrozen. During the hearing, the revenue admitted that the one-year period for provisional attachment had expired for seven of the nine accounts. An email from the CGST Preventive Section, Gandhinagar, dated 19.10.2022, confirmed that the provisional attachment for these seven accounts had ceased to have effect after one year from the date of the DRC-22 order (08.10.2021). The email also indicated that fresh attachment orders had been passed for the remaining two accounts.

Key Issues

1. Whether the provisional attachment of bank accounts under Section 83 of the CGST Act, 2017, automatically ceases to have effect after the expiry of one year from the date of the order, as stipulated in Section 83(2) of the Act? The petitioner argued that the attachment for seven accounts had expired and should be released. The revenue conceded that the period of one year had expired for these seven accounts. 2. Whether the authorities are obligated to promptly intimate the banks about the cessation of provisional attachment to enable the petitioners to operate their accounts? The petitioner contended that despite the expiry of the one-year period, the banks had not been intimated. The revenue assured the Court that the banks would be intimated within one week.