Ms Klabattu Metals vs. Union Of INDIA & Ors.
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The Petitioner, M/s Klabattua Metals, filed a writ petition challenging the provisional attachment of its bank account. The attachment was made vide a letter dated October 31, 2023. The Petitioner contended that under Section 83(2) of the Central Goods and Services Tax Act, 2017, such an attachment ceases to have effect after one year. The Respondents, Union of India and the Customs Department, were served notice. The Department informed the Court that it had already instructed the concerned bank to de-freeze the account.
Held
The Court noted the submission made by the Department that they had already written to the concerned bank directing the de-freezing of the Petitioner's bank account. The Court directed that the communication/letter regarding the de-freezing be handed over to the Petitioner's counsel within two working days and a copy be placed on record. In view of the Department's stand and the impending de-freezing, the Court found no further orders to be necessary. The Court directed that the Bank should immediately give effect to the de-freezing order to allow the Petitioner to operate its bank account. The petition was disposed of on these terms.
Key Issues
1. Whether the provisional attachment of the Petitioner's bank account, made on October 31, 2023, has ceased to have effect by operation of law, specifically Section 83(2) of the Central Goods and Services Tax Act, 2017, upon the expiry of one year from the date of attachment? Petitioner's Contention: The Petitioner argued that Section 83(2) of the CGST Act mandates that a provisional attachment shall cease to have effect after one year. Therefore, the attachment in question, made on October 31, 2023, would have lapsed by operation of law. Revenue's Contention: The Department stated that they had received instructions and had already communicated with the bank for the de-freezing of the Petitioner's bank account.
Sections Cited
Section 83(2)
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Cause title — parties, addresses and appearances
O R D E R % 05.08.2025
This hearing has been done through hybrid mode.
The present petition has been filed by the Petitioner under Article 226 of the Constitution of India, inter alia, challenging the provisional attachment of the bank account of the Petitioner being current account bearing no. 921020006079671 standing in the name of M/s Klabattua Metals at Axis Bank, Old Rohtak Road, Kishanganj, Delhi-110007 vide letter dated 31st October, 2023. 3. The submission on behalf of the Petitioner is that, in terms of Section 83(2) of the Central Goods and Services Tax Act, 2017, the provisional attachment shall cease to have effect upon the expiry of a period of one year.
Issue notice. Mr. Harpreet Singh, ld. Senior Standing Counsel accepts This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 06/08/2025 at 12:12:45
notice on behalf of the Customs Department. Mr. Ashish K. Dixit, CGSC accepts notice on behalf of Union of India.
It is submitted by ld. Counsel for the Department that they have received instructions that the Department has already written to the concerned Bank directing de-freezing of the bank account.
Let the communication/letter in respect thereof be handed over to the ld. Counsel for the Petitioner within a period of two working days from today. Let a copy of the same be also placed on record.
In view of the above stand of the Department, no further orders are required to be passed in this matter. The Bank shall immediately give effect to the de-freezing order so that the Petitioner is able to operate its bank account.
Accordingly, the petition is disposed of in these terms. All pending applications, if any, are also disposed of. PRATHIBA M. SINGH, J. SHAIL JAIN, J. AUGUST 5, 2025 Rahul/ck This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 06/08/2025 at 12:12:45
Reproduced from the public record of the Delhi High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.