Case Note & Summary
The petitioner, a partnership firm engaged in trading gold, silver, diamonds, and jewellery, had its premises searched on 09.03.2022 under Section 67(2) of the GST Act. On 10.03.2022, the respondent issued an order of provisional attachment of the petitioner's bank accounts with HDFC Bank and SBI Bank in Form GST DRC-22. During the search on 14.03.2022, gold, silver, and cash were seized under Form GST INS-02. The petitioner contended that more than 20 months had elapsed since the seizure and attachment, and despite requests dated 06.09.2023, 05.10.2023, and 17.10.2023, the respondents failed to release the goods or defreeze the accounts. The petitioner approached the High Court seeking release of seized goods and vacation of the provisional attachment. The court considered the provisions of Section 83(2) and Section 67(7) of the GST Act, which impose a one-year limitation on provisional attachment and retention of seized goods. The court held that the continued attachment and retention beyond one year are illegal and directed the respondents to defreeze the bank accounts and release the seized goods within two weeks. The petition was allowed.
Headnote
A) Goods and Services Tax - Provisional Attachment - Section 83(2) of the Central Goods and Services Tax Act, 2017 - Limitation Period - The provisional attachment of bank accounts under Section 83(2) ceases to have effect after the expiry of one year from the date of attachment - The court held that the continued attachment beyond one year is illegal and directed the respondents to defreeze the bank accounts (Paras 3-6). B) Goods and Services Tax - Seizure of Goods - Section 67(7) of the Central Goods and Services Tax Act, 2017 - Release of Seized Goods - The seizure of goods under Section 67(2) cannot continue beyond one year as per Section 67(7) - The court held that the respondents must release the seized gold, silver, and cash within two weeks (Paras 4-6).
Issue of Consideration
Whether the continued provisional attachment of bank accounts and retention of seized goods beyond one year under the GST Act is valid
Final Decision
The court allowed the petition, directing the respondents to defreeze the bank accounts and release the seized gold, silver, and cash within two weeks from the date of the order.
Law Points
- Provisional attachment under Section 83(2) of GST Act ceases after one year
- Seized goods must be released after one year under Section 67(7) of GST Act
- Limitation period for retention of seized goods is one year
