The power to provisionally attach the properties of taxpayers to protect the interest of revenue comes
from Section 83 of the CGST ACT. Sec 83 empowers the commissioner to provisionally attach any property including bank accounts belonging to the registered taxable person for the purpose of protecting the interest of Government revenue. However, said order should not be valid for more than one year from the date of passing.
A similar case came before The Honorable High Court of Delhi in the case of M/s Merlin Facilities (P.) Ltd.
V. Union of India dated May 08, 2023, where impugned order dated 13.01.2021 was passed under Section
83 of the CGST Act. According to the High Court, since the impugned order is no longer operative,
therefore they are not required to issue any order for setting aside the impugned order. The High Court
has ruled out that the operation of an order for provisionally attaching bank account would cease to be
operative after the expiry of the statutory period of one year as per Section 83(2) of the CGST Ac,2017.
SW Point of View:
Section 83(2) of the CGST Act, 2017 expressly provides that provisional attachment of any property, including a bank account to protect the interest of the revenue, after the initiation of proceedings under Chapter XII, XIV or Chapter XV shall cease to have effect after the expiry of the period of one year from the date of the order made. These are preemptive and emergency powers and must be exercised strictly in accordance with the law.
Nikita Goyal, Associate- Indirect Tax, SW India
