HC Quashes Bank Account Attachment Post Expiry of CGST Section 83(2) Period

HC Quashes Bank Account Attachment Post Expiry of CGST Section 83(2) Period

The petitioner filed a writ petition challenging the provisional attachment of his HDFC Bank account under Section 83 of the CGST Act, 2017, as per an order dated April 5, 2024. The attachment was issued pending adjudication of tax proceedings.

After this, an Order-in-Original dated January 28, 2025, was passed, concluding the adjudication proceedings. The petitioner then filed an appeal with a pre-deposit. The petitioner contended that, in any case, under Section 83(2), the provisional attachment automatically lapses one year from the date of the order under Section 83(1), i.e., after April 4, 2025, in this case.

Issue Raised: Whether a bank account provisionally attached under Section 83(1) of the CGST Act, 2017, can continue to remain frozen beyond one year, in violation of Section 83(2).

HC Held: The High Court ruled that a provisional attachment order automatically expires one year after it is issued in accordance with Section 83(2) of the CGST Act, 2017. It was no longer able to function because the attachment order from April 5, 2024, had expired on April 4, 2025. In order to make it clear that the petition was limited to this particular attachment and did not cover any subsequent or concurrent proceedings, the Court quashed and set aside the order.

In addition, the Court ordered the respondents to notify HDFC Bank of the quashing within a week. The Bank was also ordered to de-freeze the petitioner’s account upon presenting the Court’s authenticated order, regardless of whether the department had taken any action. There was no cost order, and the rule was made absolute.

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