GST Provisional Attachment Order Loses Validity After One Year

The Delhi High Court bench held that every provisional attachment order issued by the department under Section 83(1) of the Central Goods & Services Tax (GST) Act ceases to have effect after one year from the date of the order.

M/s Pashupati Properties Estate Private Limited (petitioner) challenged the letter dated 7th December 2020 issued u/s 83 of the CGST Act, 2017. The department (respondent) has used this letter to direct the bankers to attach the petitioner’s immovable property provisionally. 

The petitioner had requested the honourable court for the directions to release the immovable property from attachment as the time for order u/s 83 was over.

The respondent’s counsel submitted that after 1st December 2020, the department had not issued any fresh attachment order and no show-cause notice u/s 74 of the CGST Act. 

Justice Manmohan and Justice Sudhir Kumar Jain have considered the arguments and observed that the department had not issued any fresh attachment order on Form GST DRC-22 after issuing the attachment letter dated 07th December 2020.

The court allowed the petition and stated that according to Section 83(2) of the CGST Act, every provisional attachment order ceases to have effect after one year from the order date u/s 83(1) of the CGST Act.

Hence, the challenged provisional attachment order is no longer effective. Accordingly, the court directed the respondent to de-freeze the bank accounts and release the immovable properties of the petitioner.

For any clarifications/feedback on the topic, please get in touch with the writer at dvsr.anjaneyulu@cleartax.in