Attachment GST S. 83 Lapses Force after One Year, Cannot be Invoked to Challenge SARFAESI Proceedings: Madras HC [Read Order]
The provisional attachment order passed by the first respondent in exercise of powers under Section 83 of the CGST Act could not be made a basis to challenge any SARFAESI action , said the court.
![Attachment GST S. 83 Lapses Force after One Year, Cannot be Invoked to Challenge SARFAESI Proceedings: Madras HC [Read Order]](https://images.taxscan.in/h-upload/2025/08/09/2074760-sarfaesi-madras-hc-taxscan.webp "Attachment GST S. 83 Lapses Force after One Year, Cannot be Invoked to Challenge SARFAESI Proceedings: Madras HC [Read Order]")
The Madras High Court has held that a provisional attachment order under Section 83 of the Central Goods and Services Tax ( CGST ) Act, 2017 automatically ceases to have effect after one year and cannot be relied upon to challenge or restrain proceedings initiated by a secured creditor under the SARFAESI Act, 2002. The petitioner, K. Venkatesan a proprietor whose bank account...
The Madras High Court has held that a provisional attachment order under Section 83 of the Central Goods and Services Tax ( CGST ) Act, 2017 automatically ceases to have effect after one year and cannot be relied upon to challenge or restrain proceedings initiated by a secured creditor under the SARFAESI Act, 2002.
The petitioner, K. Venkatesan a proprietor whose bank account had been provisionally attached by the Directorate General of GST Intelligence (DGGI) on 23 February 2021, approached the Court seeking to prevent City Union Bank from initiating SARFAESI recovery measures, contending that the continuing effect of the attachment was illegal.
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The Division Bench of Chief Justice Manindra Mohan Shrivastava and Justice Sunder Mohan clarified that the grievance regarding bank recovery was misconceived, as the SARFAESI proceedings had only reached the Section 13(2) notice stage, which was not challenged.
The Court observed that “The provisional attachment order passed by the first respondent in exercise of powers under Section 83 of the CGST Act could not be made a basis to challenge any action that may be taken in future or any order passed towards recovery of loan under the SARFAESI Act. Therefore, the prayer to that extent is misconceived and, therefore, rejected.”
The Bench interpreted Section 83 to mean that the “life of a provisional attachment order is only for a period of one year and thereafter it attains its natural demise and loses its effect.” Since no successive attachment order had been issued after February 2021, the attachment stood terminated in law.
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The court, ruling that the petitioner’s account “in the eye of law, stands de-attached/defreezed,” allowed him to operate it freely.
At the same time, it made it clear that the order would not prevent the bank from pursuing lawful recovery steps under the SARFAESI Act, nor did it decide on the merits of any tax liability arising from reversal of credit orders passed by the GST authorities.
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