Delhi HC: Order for Bank Account Attachment No Longer Effective After Expiration of 1 Year U/S 83 of GST Act

In the case of M/S. Vaidhe Stainless Steel Vs. Union of India Through Its Secretary Ministry of Finance, the Delhi High Court has released an order declaring the Bank Account Attachment instructions given under section 83 of the GST Act ineffective after the expiry of one year.

Key Details From the Judgment

The petitioner has filed a petition seeking, among other things, a direction to the respondents to reverse the revocation of their GST registration.

The petitioner is dissatisfied with the directive given on 18.08.2022, which retrospectively cancelled their GST registration from 15.06.2021. Although the petitioner has applied for the revocation of the cancellation, the application has not been carried out.

The counsel representing Respondent Nos. 2 and 3 has stated, on the grounds of guidelines, that the petitioner’s revocation application will be processed within two weeks.

Considering the aforementioned arguments, no additional directives are necessary in this regard.

The petitioner is also unhappy with the directive given dated 04.08.2022 and 24.08.2022, which provisionally attached the bank accounts of the petitioner and their family members in accordance with Section 83 of the Central Goods and Services Tax Act, 2017 (referred to as the ‘CGST Act’).

The prayer made in this petition pertains solely to the attachment of the petitioner’s bank account. However, the petitioner’s counsel acknowledges that there was an oversight in not specifically including other bank accounts in the prayer, even though the complaint is mentioned in the section of the petition.

As per Section 83(2) of the CGST Act, any order passed in accordance with Section 83(1) of the CGST Act becomes ineffective after one year from the date of that order.

The counsel representing Respondent Nos. 2 and 3 has fairly stated, based on guidelines, that the orders passed dated 04.08.2022 and 24.08.2022, which provisionally attached the mentioned bank accounts, are not effective in accordance with Section 83(2) of the CGST Act.

In light of these circumstances, the respective banks are directed not to impede the operation of the aforementioned bank accounts based on the orders dated 04.08.2022 and 24.08.2022 passed, as stated in Section 83(1) of the CGST Act.