Facts of the Case: The Petitioner challenged the impugned letter dated 27.10.2023, issued in FORM GST DRC-22 by the Additional Director General, DGGI, Gurugram Zonal Unit, whereby the Petitioner’s bank account with IDBI Ltd., Ashok Vihar Branch was provisionally attached under Section 83 of the CGST Act, 2017.

The attachment was made pursuant to an investigation under Section 74 of the CGST Act on allegations of unpaid taxes. The Petitioner argued that in terms of Section 83(2) of the CGST Act, such provisional attachment ceases to have effect after one year, and since more than a year had elapsed, the order had automatically lapsed.

The Petitioner relied on the Delhi High Court’s earlier ruling in Krish Overseas v. Commissioner, where it was held that provisional attachments cannot subsist beyond the statutory one-year limit.

It was also noted that the investigation against the Petitioner had culminated in a Show Cause Notice dated 29th June 2025, which would proceed independently.

Issue: Whether the provisional attachment of the Petitioner’s bank account under Section 83 of the CGST Act can continue beyond one year from the date of the order.

Held that: The Court observed that Section 83(2) CGST Act expressly limits the life of a provisional attachment order to one year. Since more than a year had passed from the date of the impugned attachment (27.10.2023), the attachment had automatically lapsed.

Accordingly, the provisional attachment of the Petitioner’s IDBI bank account was lifted, and the Bank Manager was directed to de-freeze the account and permit the Petitioner to operate it.

However, the show cause notice proceedings dated 29.06.2025 arising from the investigation were directed to continue in accordance with law.

Case Name: M/s TIRUPATI STEEL THROUGH PROPRIETOR RAHUL MITTAL v. UNION OF INDIA & ORS. dated 25.08.2025

To read the complete judgment 2025 Taxo.online 2079