Vikas Gupta vs. Union Of INDIA And Ors

Held

The Court held that the bank accounts provisionally attached under Section 83 of the Central Goods and Services Tax Act, 2017, are deemed to be defreezed upon the lapse of one year if no fresh provisional attachment order has been issued. This finding was based on the concession made by the respondents' Senior Standing Counsel. The Court reasoned that the respondents themselves acknowledged the legal position that the attachment ceases to be effective after one year in the absence of a subsequent order. Consequently, the Court found the petition to have become infructuous. The operative direction was to dismiss the petition as having been rendered infructuous.

Facts

The petitioner, Vikas Gupta, filed a writ petition before the Punjab and Haryana High Court challenging an attachment order dated November 27, 2020, passed by respondent No. 2. This order provisionally attached the petitioner's bank accounts maintained with respondents No. 3 to 5. The petitioner sought the defreezing of these accounts, arguing that one year had elapsed since the attachment order was issued. The respondents, represented by learned Senior Standing Counsel, acknowledged that bank accounts frozen under Section 83 of the Central Goods and Services Tax Act, 2017, are deemed to be defreezed after one year if a fresh provisional attachment order has not been passed.

Key Issues

1. Whether bank accounts provisionally attached under Section 83 of the Central Goods and Services Tax Act, 2017, are automatically defreezed upon the lapse of one year if no fresh attachment order is issued? (Question of law) Petitioner's contention: The petitioner argued that since one year had passed since the attachment order dated November 27, 2020, the bank accounts should be defreezed. The petitioner relied on the implied understanding that such attachments have a limited duration. Respondents' contention: The respondents, through their Senior Standing Counsel, conceded the petitioner's proposition. They stated that there is no doubt that after the lapse of one year, the freezed accounts would be deemed to be defreezed where a fresh provisional attachment order had not been passed. The respondents did not cite any specific provisions or precedents in their argument.