Re-attachment order passed u/s 83 without any fresh justification, is arbitrary

The Allahabad High Court in this case found the reattachment order draconian and arbitrary. It emphasized that provisional attachment under Section 83 is a drastic measure and must be supported by fresh tangible reasons, especially in cases of reattachment. Referred Supreme Court ruling in Radha Krishan Industries vs. State of Himachal Pradesh (2021) 6 SCC 771, which held that without new material changes, a second attachment order would be invalid. Also, referred to the Calcutta High Court’s ruling in Amazonite Steels Pvt. Ltd. vs. Union of India, emphasizing that provisional attachment should be a carefully used mechanism to prevent tax evasion, not a tool to burden taxpayers unjustly.

It was observed that “the department cannot be allowed simpliciter to issue a second notice, and thereafter, third and fourth and continue with the provisional attachment for four to five years without giving any fresh reason for the said provisional attachment. If the same was allowed, Sub-section 2 of Section 83 of the Central Goods and Service Tax Act, 2017 would become otiose and have no relevance whatsoever.”

Writ Petition filed to challenge provisional attachment order passed us 83. The Bank Account of the petitioner was provisionally attached through an order. After the expiry of the one-year period, the petitioner filed a writ petition seeking the removal of the attachment. Following the filing of the petition, the attachment was removed. However, just ten days after the order, a new notice was issued, provisionally attaching the account for the second time without offering any fresh reasons for the attachment. The petitioner contended that the reattachment was arbitrary, lacking the necessary specific reasons required by law.

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