In Writ Petition No. 3742 of 2023 -BOM HC- Bombay High Court rules order disposing of objections to provisional bank account attachment not appealable,says Writ Petition the appropriate remedy
Justice G.S. Kulkarni & Justice Jitendra Jain [30-06-2023]

Read Order: Bharat Parihar and Ors v. State of Maharashtra and Ors

Chahat Varma

New Delhi, July 6, 2023: The Bombay High Court recently ruled that the order disposing of objections to the provisional attachment of a bank account was not appealable. Citing the Supreme Court's decision in Radha Krishan Industries vs. State of Himachal Pradesh [LQ/SC/2021/2724], the High Court determined that the appropriate course of action in such cases was to file a writ petition under Article 226 of the Indian Constitution. Consequently, the High Court proceeded to entertain the present writ petition, affirming its jurisdiction to address the matter.

In the present writ petition, the petitionerhad challenged the provisional attachment of their bank account with Yes Bank, Mumbai, under Section 83 of the Central Goods and Services Tax Act (CGST Act) and further communication dated 19th April 2023, whereby the provisional attachment made on 21st April 2022 was retained under Section 83 of the CGST Act.

The division bench of Justice G.S. Kulkarni and Justice Jitendra Jain noted that in the present case, the provisional attachment order was issued on 21st April 2022, and the one-year period from that date expired on 21st April 2023. They emphasized that, according to the law, the provisional attachment order ceases to have any effect after its expiry.

The bench further observed that mere notations in the file of the concerned officer cannot be considered as a formal order, as required by the law. Moreover, such an order must be communicated to the affected person whose bank account is being attached. The respondent authorities,in the present case,failed to demonstrate that such a formal order was passed and served to the petitioner, especially before the provisional attachment order ceased to operate under the provisions of Section 83(2) and the communication dated 19th April 2023. Furthermore, the respondent authorities did not dispute that the letter dated 19th April 2023 was merely a communication to the bank to retain the provisional attachment of the account. Therefore, the bench held that it cannot be considered as a fresh order under Section 83(1) provisionally attaching the petitioner's bank account.

Based on these considerations, the bench concluded that the communication on April 21, 2022, which provisionally attached the petitioner's bank account, was illegal and invalid under Section 83(2) of the CGST Act. Additionally, the extension of the provisional attachment through the communication of April 19, 2023, was set aside and quashed.