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WRIT PETITION NO .3742 OF 2023, HIGH COURT OF BOMBAY 

Background:

1. Timeline: 

• 21 April 2022 – Provisional Attachment of Bank Account 

• 21 April 2023 – Expiry of Provisional attachment as per Sec 83 (1) being expiry of one year from the date of attachment.

• 19 April 2023 – Communication from Respondents to the bank to retain provisional attachment. 

2. The petitioner via Writ Petition “contests” the Provisional Attachment of their bank account with Yes Bank, Mumbai, under Section 83 of the CGST Act, 2017, addressing the retention of the initial attachment made on 21 April 2022 through a communication dated 19 April 2023. 

3. The petition is filed after the objections of the Petitioner to provisional attachment were disposed of under Rule 159(5) of the CGST Rules by the Respondents. 

Arguments of Petitioner:

1. Petitioner cites & relies on the case of Radha Krishan  Industries vs. State of Himachal Pradesh [(2021) 6 Supreme Court Cases 771 – 2021-VIL-50-SC] where the Supreme Court held that objections to provisional attachment are not appealable; only remedy is via writ                  jurisdiction under Article 226 of the Constitution of India. 

2. That the provisional attachment order ceases to have effect after one year from the order date as per Section 83(2) of the CGST Act. 

Arguments of Respondent: 

1. The respondents argue that the order disposing off objections is appealable as per Section 107 of the  Act and therefore, this Court should not entertain the petition. 

2. The respondent contended before the Hon’ble High Court that a new order had been issued before the expiration of the provisional attachment order dated 21st April 2022. This new order had also been documented on the order sheet and a copy of it was attached to the respondent’s reply. 

3. Fresh Order passed via Respondent’s letter dated 19 April 2023 to the Bankers with a copy marked to the Petitioner. 

4. The respondent contended that since, the fresh  attachment order was passed, the attaching of the Bank  account shall be valid, not disputing the fact that the letter dated 19 April 2023 is only a communication to the bank. 

5. Respondents also relied on the Gujarat High Court case of Shrimati Priti Amrutlal Gandhi vs. State of Gujarat [2011 SCC OnLine Guj 1869] – 2011-VIL-436-GUJ to support the contention that a fresh attachment order has been passed, considering that the communication dated 19 April 2023 is a valid communication of a new attachment order. 

Judgement:

1. Section 83 of the CGST Act provides for provisional attachment of property, including bank accounts, for protecting  government revenue. 

2. Provisional attachment made under Section 83(1) ceases to have effect after one year from the date of the order. 

3. The communication dated 19 April 2023 from Respondents is not a fresh order but a communication to retain provisional attachment.

4. We do not find any fresh order having being passed by the Respondents to attach the bank account on 19 April 2023.

5. Respondents have not disputed that letter of 19 April 2023 is only a communication to the bank, to retain provisional attachment of the account. 

6. Also, the said communication letter cannot be regarded as a fresh order under Section 83(1) for provisionally attaching  the petitioner’s bank account.

7. On further perusal it is observed that for the earlier provisional attachment on 21 April 2022 was done on the  basis of notings in the file of the concerned Officer which cannot be constituted as a formal order passed under law. 

8. The communication dated 21 April 2022 provisionally attaching the Petitioner’s bank account is rendered illegal due to Section 83(2) of the CGST Act. 
9. The extension of provisional attachment by the communication dated 19^th  April 2023 is quashed and set aside.