The Delhi High Court stated that a provisional attachment order under section 83 of the Goods and Services Tax Act, 2017 (GST Act) cannot continue after its statutory one-year period, directing the de-freezing of a GST-implicated entity’s bank account while charging a minimum-balance requirement.
A petition has been filed by M/s Aar Gee Impex contesting 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 subject to a group action that comprises four entities, though the present petition related to M/s Aar Gee Impex.
Pranay Jain had appeared for the appellant, who mentioned that a provisional attachment could not legally subsist after a 1-year limitation specified under section 83 of the GST Act, 2017. He cited that even after the allegations of GST evasion, the department does not issue an SCN or start adjudication, which leads to the continued freezing of the account wholly unsustainable.
Harpreet Singh, Suhani Mathur, Jatin K. Gaur, and Jai Ahuja, the representative of the respondent authorities, claimed that the applicant was engaged in the GST evasion of nearly Rs 11.37 Lakh via bogus and ineligible ITC taken from the non-existent entities.
The bench of Justice Prathiba M. Singh and Justice Shail Jain ruled that a provisional attachment order issued u/s 83 of the GST Act, 2017, automatically ceases after one year and cannot be extended.
The Court ruled the attachment had lapsed as the attachment order was dated 29 May 2024, and no Show Cause Notice had been issued to date. Thereafter, the applicant will be permitted to function its bank account freely and should keep a minimum balance of Rs 10,00,000 in the said account.
The Court, while lifting the freeze, considered the Department’s allegation of GST evasion and directed that the provisional attachment order dated 29 May 2024 shall stand lifted. Subsequently, the writ petition was disposed of.
| Case Title | M/s Aar Gee Impex vs. Directorate General of Services Tax Intelligence |
| Case No. | W.P.(C) 10114/2025 |
| For Petitioner | Mr Pranay Jain |
| For Respondent | Mr Harpreet Singh, Ms Suhani Mathur, Mr Jatin K Gaur, Mr Jai Ahuja |
| Delhi High Court | Read Order |
