High Court Upholds Provisional Attachment of Bank Accounts under Section 83 of CGST Act

High Court Upholds Provisional Attachment of Bank Accounts under Section 83 of the CGST Act

The petitioner filed a writ petition under Article 226 of the Constitution of India challenging the order dated 6th March 2025 passed by the Principal Additional Director General, Directorate General of GST Intelligence (Headquarters), by which its two current accounts maintained with ICICI Bank, Bhiwani Mandi Branch, were provisionally attached under Section 83 of the Central Goods and Services Tax Act, 2017. The petitioner contended that the impugned order was without jurisdiction since the officer who issued it was not a “Commissioner” as contemplated under Section 83. It was contended that only the Commissioner could pass an order under the provision, and the provisional attachment caused considerable difficulty in the applicant’s works.

The petitioner further mentioned that it had raised an objection against the attachment before the Commissioner, DGGI, pursuant to Rule 159(5) of the CGST Rules, 2017, on September 2, 2025, against the competence of the officer and the validity and legality of the attachment. The Senior Standing Counsel appearing for the respondents relied upon the Notification No.14/2017;- dated July 1, 2017, issued by the Ministry of Finance, Department of Revenue (Central Board of Excise and Customs)-to argue that the Principal Additional Director General, DGGI holds the rank of Principal Commissioner of GST and was duly authorised to exercise the powers under Section 83 of the CGST Act. The respondents further contended that the attachment was initiated in compliance with the respective laws after initiation of proceedings under the CGST Act. Before the issuance of notice, on behalf of both sides.

Issue Raised: Whether the Principal Additional Director General, DGGI, is competent to order provisional attachment of a taxpayer’s bank accounts under Section 83 of the CGST Act, 2017, or if such power vests solely with a Commissioner; and whether the attachment order required further communication of reasons to the taxpayer.

HC Held: The Court held that the petitioner’s challenge to the authority of the Principal Additional Director General, DGGI, could not be sustained. Referring to Notification No.14/2017 dated 1st July 2017 issued by the Ministry of Finance, the Court noted that the said notification expressly equates the rank of the Principal Additional Director General, Goods and Services Tax Intelligence, with that of a Principal Commissioner of GST. Therefore, the Court concluded that the officer who issued the order was fully competent to exercise the power of provisional attachment under Section 83 of the CGST Act. The Bench observed that the argument regarding lack of authorisation had no merit and therefore, the attachment could not be quashed on that ground.

Nonetheless, to ensure compliance with the principles of natural justice, the Court allowed the petitioner to submit fresh objections against the provisional attachment. The Court stated that, after filing, the reasons for the attachment will be provided to the petitioner within two weeks. The Court noted that the petitioner had the right to pursue any remedies available under the law using the prescribed procedure. In light of these directions, the writ petition and pending applications were disposed of.

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