Facts of the Case:

In this case, the petitioner challenged the provisional attachment of its bank account ordered under Section 83 of the Central Goods and Services Tax Act, 2017. The attachment order dated 27.02.2026 was issued by the GST authorities directing the petitioner’s banker to freeze its account purportedly to protect the interest of government revenue.

The petitioner contended that the attachment order was passed mechanically without recording or demonstrating any independent satisfaction or formation of opinion by the competent authority as required under Section 83. It was argued that the order merely reproduced the statutory language and stated that the attachment was necessary to protect revenue, without disclosing any material or reasons supporting such satisfaction.

The petitioner further submitted that the freezing of its bank account had severely affected its business operations, including payment of salaries and other operational expenses. Reliance was placed on the Supreme Court decision in Radha Krishan Industries v. State of Himachal Pradesh, wherein stringent conditions governing the exercise of power under Section 83 were laid down.

Issue:

Whether a provisional attachment order issued under Section 83 of the CGST Act is sustainable when the competent authority has not recorded or demonstrated formation of an opinion, based on tangible material, that such attachment is necessary for protecting the interest of government revenue.

Held That:

The High Court allowed the writ petition and set aside the provisional attachment order. The Court observed that Section 83 confers a drastic and extraordinary power having serious civil consequences and therefore the statutory preconditions must be strictly complied with. Relying upon the Supreme Court’s judgment in Radha Krishan Industries v. State of Himachal Pradesh, the Court reiterated that before invoking Section 83, the Commissioner must form an opinion based on relevant material that provisional attachment is necessary to protect the interests of revenue.

Upon examining the impugned order, the Court found that it merely stated that the bank account was being attached to protect government revenue and did not disclose any formation of opinion or satisfaction by the competent authority. The order reflected a mechanical exercise of power and failed to satisfy the mandatory statutory requirements prescribed under Section 83. The Court emphasized that the validity of provisional attachment depends upon strict compliance with the statutory safeguards identified by the Supreme Court, including formation of opinion, existence of necessity, issuance of a written order, and adherence to procedural requirements.

Since no material was placed before the Court to establish compliance with these mandatory conditions, the attachment order was held to be unsustainable in law. Consequently, the impugned attachment order was quashed and the respondent bank was directed to immediately de-freeze the petitioner’s bank account.

Case Name: M/s. Shri Petro Chemical Mercantile Pvt. Ltd. Versus The Union of India, The Directorate General of GST Intelligence (DGGI) New Delhi, Ashish Mishra Additional Director General DGGI Siliguri, Md. Nayeem Senior Intelligence Officer (DGGI) Siliguri, Punjab And Sind Bank Dimapur Branch. dated 22.06.2026

To read the complete judgement 2026 Taxo.online 1728