Revocation of Provisional Attachment of Bank Account under s. 83 read with Rule 159(5) of the CGST Act/Rules, 2017 [Read Order]

Provisional attachment of a taxpayer’s bank account is the harshest interim measure available to the Goods and Services Tax (GST) administration. Section 83, as substituted with effect from 1 January 2022, authorises the Commissioner to attach property only after proceedings under Chapters XII, XIV or XV have commenced and he forms a reasoned opinion that such attachment is necessary to protect the interest of the Government revenue. Rule 159 operationalises this power through Form GSTDRC-22 (order of attachment) and Form GST DRC-23 (order of release).

Once the bank learns of the freeze order, the registered person must act swiftly. Rule 159(5) grants a seven-day window from service of Form DRC-22 to file an objection before “the Commissioner who ordered the attachment”. The objection need not follow a rigid format, but practitioners generally adopt a structured petition addressed to The Proper Officer, Division, CGST & Central Excise, quoting the attachment order number, date, attached account number and the related show-cause notice (SCN) issued under s. 62/63/64/73/74, as relevant.

The taxpayer’s burden is to demonstrate that the attachment is not “necessary”. Strong grounds include: (i) regular filing of GSTR-1 and GSTR-3B returns and prompt discharge of tax; (ii) positive net worth far exceeding the contested liability (backed by audited financials and a CA certificate); (iii) absence of fraud or clandestine removal allegations; and (iv) availability of less intrusive safeguards, e.g. a bank guarantee or charge over immovable property.

Citing Supreme Court precedent—Radha Krishan Industries (2021) calling the power “draconian” to be used sparingly, and earlier high-court rulings such as Valerius Industries (2019)—reinforces the plea that a working-capital freeze cripples ongoing GST inflows and ultimately prejudices the revenue.

A concise table of judicial principles (case, proposition) may accompany the objection, along with enclosures: copy of the DRC-22, SCN, return summaries, audited statements, net-worth certificate and an authorised signatory’s affidavit. Remember that CBIC’s guidelines dated 23 February 2021 also caution officers to prefer immovable property and to avoid disrupting ordinary business.

On being “satisfied that the property is no longer liable for attachment”, the Commissioner must revoke the order through Form DRC-23. Where he maintains the attachment or remains silent, the aggrieved person may seek writ relief; courts have routinely quashed mechanical or unreasoned orders.

Before printing, ensure all placeholders—designation of the officer, address, dates (e.g., [● DD/MM/2025]), bank and branch, GSTIN, net-worth figure, SCN details and contact particulars—are filled accurately. A well-supported, timely objection not only protects the taxpayer’s liquidity but also reminds the administration that extraordinary powers demand extraordinary care.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates