Sh. Nitin Singhania vs. Commissioner Of Central Tax GST, Delhi (East)

Held

The Court held that on a plain reading of Section 83 of the Central Goods and Service Tax Act, 2017, the provisional attachment order dated March 31, 2021, could not continue beyond one year. The respondent's counsel confirmed that no fresh attachment order had been passed. Consequently, the Court directed the respondent to lift the attachment on the bank accounts and property. The respondent was ordered to convey this information to the concerned bank within three days of receiving the order. The Court allowed the prayers related to releasing the bank accounts and property and quashing the provisional attachment orders. The Court clarified that this decision would not impede the respondent from carrying out investigations or taking further steps as per law. The issue regarding the order dated January 28, 2022, was not decided on merits as it was withdrawn by the petitioner.

Facts

The petitioner, Sh. Nitin Singhania, filed a writ petition seeking a mandamus to release/defreeze/allow the operation of three bank accounts and one property that were provisionally attached by the Commissioner of Central Tax GST, Delhi (East) on March 31, 2021. The petitioner also sought to quash the provisional attachment orders and a subsequent order dated January 28, 2022. During the proceedings, the petitioner withdrew the prayer to quash the order dated January 28, 2022. The principal grievance was that the provisional attachment had been in place since March 31, 2021, and the petitioner contended that as per Section 83 of the CGST Act, 2017, the maximum period for such attachment is one year. The respondent initially sought time to obtain instructions and did not file a counter-affidavit.

Key Issues

1. Whether the provisional attachment of bank accounts and property, ordered on March 31, 2021, can continue beyond one year as per Section 83 of the Central Goods and Service Tax Act, 2017? Petitioner's arguments: The petitioner argued that Section 83 of the CGST Act, 2017, limits the duration of provisional attachment to one year, and therefore, the attachment order dated March 31, 2021, could not remain alive beyond that period. Respondent's arguments: The respondent's counsel initially agreed with the petitioner's position regarding the one-year timeframe. Subsequently, the respondent stated that no fresh attachment order had been passed. The respondent did not present any arguments to justify the continuation of the attachment beyond the statutory period.