Facts of the Case:

In this case, the e petitioner’s bank accounts were provisionally attached by the GST authorities through issuance of Form GST DRC-22 under Section 83 of the CGST Act and the corresponding provisions of the Delhi GST Act during the pendency of proceedings. The initial attachment remained in force for the statutory period of one year and thereafter automatically lapsed by operation of law. Subsequently, after completion of the assessment proceedings culminating in an O-I-O and during the pendency of appellate proceedings, the authorities issued a fresh provisional attachment order against the petitioner’s bank accounts. This second attachment was based on the same set of facts and allegations as the earlier one, without citing any new material, fresh evidence, or change in circumstances.

Aggrieved by the repeated invocation of Section 83, the petitioner approached the High Court contending that such successive attachment, post expiry of the earlier order and after completion of assessment, was arbitrary, without jurisdiction, and contrary to the scheme of the Act.

Issue:

Whether provisional attachment under Section 83 can be re-imposed on the same factual basis after expiry of the earlier attachment. Whether fresh material or change in circumstances is a precondition for invoking Section 83 again.  Whether provisional attachment can continue or be revived after completion of assessment proceedings.

Held That:

The High Court held that the successive invocation of provisional attachment powers was unsustainable in law. It observed that once an attachment order has lapsed by efflux of time, the authorities cannot mechanically re-impose the same on identical facts without demonstrating any fresh material or changed circumstances.

The Court emphasized that Section 83 is a drastic and extraordinary power, intended to protect the interest of revenue during pendency of proceedings, and therefore must be exercised strictly within its statutory limits. Once the assessment proceedings had concluded through an Order-in-Original, any further invocation of Section 83 required independent justification based on new facts, which was absent in the present case.

It was further held that the failure of the authorities to take appropriate action within the validity period of the earlier attachment could not be used as a ground to revive or reissue attachment orders subsequently on the same basis.

Accordingly, the Court declared the impugned attachment as arbitrary and legally untenable, and directed the defreezing of the petitioner’s bank accounts, granting consequential relief.

Case Name:  Gujral Sons v. Union of India dated 24.04.2026

To read the complete judgement 2026 Taxo.online 1136