Mechanical Attachment u/s 83 of GST without Formation of Opinion Unsustainable: Gauhati HC De-Freezes Bank A/c [Read Order]

The Gauhati High Court has set aside a provisional attachment of a taxpayer’s bank account under Section 83 of the Central Goods and Services Tax (CGST) Act, 2017, holding that the attachment order was passed mechanically.

The Court directed the concerned bank to immediately de-freeze the petitioner’s bank account after finding that the statutory preconditions for invoking the power of provisional attachment had not been satisfied.

M/s Shri Petro Chemical Mercantile Pvt. Ltd., challenged the provisional attachment order dated February 27, 2026 issued by the Directorate General of GST Intelligence (DGGI), under Section 83 of the CGST Act.

The impugned order directed the attachment of the petitioner’s bank account maintained with Punjab and Sind Bank, Dimapur Branch, purportedly to protect the interests of Government revenue.

Appearing for the petitioner, Senior Advocate Dr. A. Saraf contended that the attachment order had been issued in a completely mechanical manner without complying with the mandatory requirement of forming an opinion before exercising powers under Section 83.

It was argued that the impugned order merely reproduced the statutory language stating that attachment was necessary to protect Government revenue but failed to disclose any independent satisfaction or reasons demonstrating why such extraordinary power was required to be exercised in the facts of the case.

The petitioner submitted the Supreme Court’s judgment in Radha Krishan Industries v. State of Himachal Pradesh, where it was held that powers under Section 83 are draconian in nature and can be invoked only after strict compliance with the statutory safeguards.

Further, it was submitted that the Supreme Court had held that the Commissioner must first form an opinion that provisional attachment is necessary to protect Government revenue and that such opinion must be based on objective material rather than mere reproduction of statutory language.

Justice Nelson Sailo found that it did not indicate that the competent authority had formed any opinion before directing provisional attachment of the bank account.

The Court observed that the order merely stated that the attachment was being made to protect Government revenue under powers conferred by Section 83, without recording any satisfaction regarding the necessity of such action.

The bench concurred with the opinion of the Supreme Court in the decision of Radha Krishan Industries which held that an attachment which is contemplated in Section 83 of the Act of 2017 is at a stage which is anterior to the finalization of an assessment or raising of a demand.

The High Court, in the present matter observed that “it can be seen that the impugned order has been passed in a mechanical manner without there being any formation of opinion by citing that the requirement was to protect the interest of the revenue and the authority was empowered to do so under Section 83 of the Act of 2017. The same in the considered view of this Court, in view of the decision rendered by the Hon’ble Apex Court, runs short of the required or the mandatory procedure prescribed of forming an opinion prior to issuance of such an Attachment Order.”

Accordingly, the Gauhati High Court set aside the provisional attachment order dated February 27, 2026 (digitally signed on February 26, 2026) and directed Punjab and Sind Bank to immediately de-freeze the petitioner’s bank account.

The writ petition was allowed.

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