In the present case, the Petitioner’s bank account was provisionally attached vide order dated 19.05.2023. The singular submission of the Petitioner was that according to the provisions of Section 83(2) the validity of attachment of property is only up to 1 year from the date of the order. And since that period has hence expired, the order may be directed to be set aside on completion of one year from said date.
The respondents submitted that there were internal discussions on the extension of the period of provisional attachment. However, there was no finality to such discussions and there was no passing of fresh orders of extension. The Hon’ble Telangana High Court thus held that an order for provisional attachment ceases to have validity upon expiry of the period of 1 year from the date of issuance of order.
W&B Comments: The Court’s decision underscores the importance of adhering to the statutory time limits imposed under Section 83(2) of the CGST Act, 2017, which restricts the validity of a provisional attachment order to one year. The ruling emphasizes that, despite internal discussions on the extension, the failure to pass a fresh order within the stipulated timeframe results in the automatic cessation of the attachment's validity. This judgment aligns with prior decisions that aim to prevent the potential abuse of the provisional attachment power, reinforcing that such measures must strictly comply with the procedural safeguards outlined in the law to protect taxpayers' rights.