Attachment of Bank Accounts — The legal issues which need to be addressed in the above writ petitions are as follows:
A. Whether the Principal Additional Director General, DGGI and Additional Director General, DGGI are competent to pass orders under Section 83 of the CGST Act, 2017?
B. Whether an order passed under Section 83 of the CGST Act, 2017, remains valid after the expiry of one year from the date of the order?
C. Whether the authorities can issue fresh order of provisional attachment/multiple orders under Section 83 of the CGST Act, 2017?
Held that— 1 Both the officers that have passed the orders under Section 83 of the CGST Act, 2017 are competent to pass the same, and accordingly, the issue is answered in favour of the Revenue. The actions of the respondent authorities in continuing with the provisional attachment beyond the period of one year and without informing the bank that the provisional attachment seizes to operate after a period of one year is an act that is reprehensible and absolutely contrary to law. Such an arbitrary action has clearly resulted in violation of the petitioners’ rights for carrying on business under Article 19(1) of the Constitution of India and under Article 300A of the Constitution of India wherein the petitioners have been deprived of their property without authority of law. Accordingly, the issue is answered in favour of the petitioners and the respondent authorities are directed to pay costs of Rs. 5 lakhs to each of the three petitioners. This amount should be deposited in the current accounts that have provisionally attached within a period of four weeks from date. Section 83 empowers the competent authority to issue an order for provisional attachment of property including bank accounts if it is of the opinion that such step is necessary for protecting the interest of the Revenue. It is palpably clear that Section 83(2) permits continuation of a provisional attachment order for a period of one year from the date of order after which it ceases to remain in effect. However, there is nothing in the section which indicates that upon completion of the prescribed period, a fresh order cannot be issued. To say this would amount to supplying such requirements into the section which would go against the well-established principles of interpretation of statutes. In the view point of the Court, after the expiry of the time period, the appropriate authority may be of the opinion that such an attachment is further required to protect the interest of Revenue, and may therefore, issue a fresh order upon compliance of the formalities in Section 83(1). Accordingly, the issue is answered in favour of the Revenue.
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