S. 83 Attachment under GST Lapses after One Year: Delhi HC orders Release of Bank A/c subject to Rs. 10L Min Balance [Read Order]
The Court ordered the release of the bank account subject to a ₹10 lakh minimum-balance condition.
The Delhi High Court held that a provisional attachment order under Section 83 of the Goods and Services Tax Act, 2017 (GST Act) cannot continue beyond its statutory one-year period, directing the de-freezing of a GST-implicated entity’s bank account while imposing a minimum-balance requirement.
M/s Aar Gee Impex filed a petition challenging the provisional attachment of its current account with Kotak Mahindra Bank, Bandra (East), Mumbai, imposed by the Directorate General of Goods and Services Tax Intelligence, Jaipur Zonal Unit. The attachment order was part of a group action involving four entities, though the present petition concerned only M/s Aar Gee Impex.
Appearing for the Appellant, Pranay Jain submitted that a provisional attachment cannot legally subsist beyond the one-year limitation prescribed under Section 83 of the GST Act, 2017. He highlighted that despite allegations of GST evasion, the Department had not issued a Show Cause Notice or commenced adjudication, rendering the continued freezing of the account wholly unsustainable.
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Representing the Respondent Authorities, Harpreet Singh, Suhani Mathur, Jatin K. Gaur, and Jai Ahuja, argued that the petitioner was involved in GST evasion of approximately ₹11.37 lakh through fraudulent and ineligible Input Tax Credit availed from non-existent entities.
The bench of Justice Prathiba M. Singh and Justice Shail Jain held that a provisional attachment order issued under Section 83 of the GST Act, 2017 automatically ceases after one year and cannot be extended. Since the attachment order was dated 29 May 2024 and no Show Cause Notice had been issued till date, the Court ruled the attachment had been lapsed. Subsequently, the petitioner shall be allowed to operate its bank account freely and must maintain a minimum balance of ₹10,00,000 in the said account.
While lifting the freeze, the Court considered the Department’s allegation of GST evasion and directed that the provisional attachment order dated 29 May 2024 shall stand lifted. The writ petition was disposed of accordingly.
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