The Gujarat High Court has disposed of a writ petition challenging a second provisional attachment of the same bank accounts under Section 83 of the CGST/GGST Act after the department itself released the accounts before the matter came up for hearing, leaving open the underlying legality of repeat attachment orders issued after the statutory one-year period.

Facts of the Case

Subham Traders ("the petitioner") had its bank account with INDUSIND Bank Ltd., Surat provisionally attached by an order in Form GST DRC-22 dated 26.09.2019, issued under Section 83(2) of the CGST/GGST Act, 2017. The petitioner contended that the one-year statutory life of that attachment had already expired. Notwithstanding this, a fresh provisional attachment order in Form DRC-22 dated 30.09.2021 was issued on the very same bank accounts. The petitioner approached the High Court seeking to set aside both attachment orders as contrary to Section 83, and for a direction to supply copies of documents seized during the search proceedings under Section 67(5) of the Act.

Issues Involved

  1. Whether a provisional attachment order under Section 83(2), which has outlived its one-year statutory life, can be effectively revived by a fresh order on the same bank accounts.
  2. Whether the petitioner was entitled to relief once the department had already released the accounts before the hearing.

Petitioner's Arguments

  • The one-year period prescribed under Section 83(2) for the attachment dated 26.09.2019 had already expired, rendering its continuation illegal.
  • The fresh attachment dated 30.09.2021 on the same accounts amounted to a colourable repetition in complete violation of Section 83.
  • Sought copies of documents seized during the search under Section 67(5) of the Act.

Respondent's Arguments

  • Produced letters dated 17.11.2021 addressed to the branch managers of State Bank of India, INDUSIND Bank and ICICI Bank, Surat, informing them that the petitioner was permitted to operate its bank accounts, showing that the department had already released the attachment before the hearing.

Court Order / Findings

  • On the department's own showing, there was no subsisting order of provisional attachment on any of the three bank accounts as on the date of hearing.
  • Since the accounts already stood released, the Court held that nothing further required adjudication and disposed of the writ application without recording any finding on the legality of the second attachment order or the one-year limit under Section 83(2).
  • Direct service was permitted.

Important Clarification

  • Where the department itself lifts a provisional attachment under Section 83 before the writ is heard, courts will treat the challenge as having achieved its practical purpose and dispose of the petition without adjudicating the underlying legality. Such a disposal should not be read as approval of the practice of issuing repeat attachment orders after the one-year period under Section 83(2) has already run.

Sections Involved

  • Section 83, CGST Act, 2017 — provisional attachment of property to protect government revenue; sub-section (2) caps such attachment at one year from the date of the order.
  • Section 67(5), CGST Act, 2017 — furnishing of copies of seized documents/statements to the person from whom they were seized.

Decision – In Favour of

Disposed of with no adjudication on merits; practically favourable to the Assessee since the bank accounts stood released, though no formal ruling was made on the validity of the repeat attachment.

Related Case Laws

This order may usefully be read with other case notes on this site examining the one-year statutory limit on provisional attachment under Section 83 of the CGST Act and the scope for its renewal.

Case Details

  • Court: High Court of Gujarat at Ahmedabad
  • Case No.: R/Special Civil Application No. 14706 of 2021
  • Coram: Hon'ble Mr. Justice J.B. Pardiwala and Hon'ble Ms. Justice Nisha M. Thakore
  • Order Date: 03.03.2022

Link to Download the Order

https://mytaxexpert.co.in/uploads/1787075862_4620compressed.pdf

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