In a recent decision, the Delhi High Court observed that the maximum period for attachment of cash credit accounts under Section 83(2) of the Central Goods and Services Tax Act, 2017 (CGST Act) is one year.
The counsel for the petitioner submitted that maximum period for attachment of cash credit accounts in terms of Section 83(2) of the CGST Act is a period of one year from the date the order is made under Section 83(1) of the CGST Act and that since orders have ceased to operate, there can be no impediment in petitioners operating the cash credit accounts.
The counsel further submitted that repeated attachment of cash credit accounts in exercise of power under Section 83 of the CGST Act is in breach of the provisions of Section 83(2) and such exercise could not have been undertaken and that petitioners have not received copies of attachment order dated 13.12.2023.
The counsel for the respondents conceded to the statutory position that orders passed under Section 83(1) of the CGST Act provisionally attaching the cash credit accounts have a life of only one year and cease to operate after the expiry of period of one year from the date it is made. The counsel however, submitted that fresh attachment order dated 13.12.2023 has been passed once again provisionally attaching the cash credit accounts under Section 83(1) of the CGST Act.
A Division Bench of Justices Sanjeev Sachdeva and Ravinder Dudeja observed that “In view of the above, admitted position that the order, subject matter of these proceedings has ceased to operate, the petition is disposed of reserving the right of the petitioner to impugn the fresh attachment order dated 13.12.2023 in accordance with law. The question of validity of repeated issuance of attachment orders under Section 83 of the CGST Act is left open.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
