Facts of the Case:

The writ petition was filed challenging the continuation of provisional attachment of bank accounts under Section 83 of the Central Goods and Services Tax Act, 2017. An order of provisional attachment dated 3rd June, 2024 was passed by the respondent authority attaching Bank Account No. 135605500936 maintained with ICICI Bank, thereby restraining the petitioner from operating the said account. Additionally, another Savings Bank Account No. 072401004328 of the petitioner was also frozen, allegedly on the ground that it was linked to the same PAN, despite there being no separate attachment order in respect thereof.

The petitioner contended that by virtue of Section 83(2) of the CGST Act, any provisional attachment ceases automatically after the expiry of one year from the date of the order, and therefore, the attachment stood lapsed on 2nd June, 2025. Despite the statutory lapse, neither the department nor the bank had lifted the attachment.

The respondent argued that since proceedings under the Act were still pending, the attachment could continue.

Issue:

Whether a provisional attachment of bank accounts under Section 83(1) of the CGST Act can continue beyond one year, notwithstanding the pendency of proceedings, and whether accounts not expressly covered by an attachment order can be lawfully frozen.

Held that:

In the present case, since the provisional attachment order was passed on 3rd June, 2024, the attachment automatically lapsed on 2nd June, 2025. The failure of the respondent authorities and the bank to lift the attachment thereafter was held to be contrary to the statutory mandate.  With respect to the second savings bank account, the Court observed that there was no material on record to show that any independent order under Section 83 had been passed attaching that account. Even assuming that the account was attached incidentally or through a formality, the Court held that such attachment too could not survive beyond one year.

The Court held that Section 83(2) of the CGST Act operates automatically, and once a period of one year from the date of provisional attachment expires, the attachment ceases to operate by force of statute, irrespective of whether proceedings under the Act are still pending. Accordingly, the Court declared that the provisional attachment in respect of both bank accounts had become non-operational under Section 83(2) and partly allowed the writ petition by quashing the impugned attachment order to that extent.

Case Name: Shagun Goel Versus Directorate General of GST Intelligence & Anr. dated 21.01.2026

To read the complete judgement 2026 Taxo.online 245