Renewal of Provisional Attachment after One Year Invalid | SC

Case Details: Kesari Nandan Mobile Versus Office of Assistant Commissioner of State Tax (2025) 33 Centax 224 (S.C.) 

Judiciary and Counsel Details

• DIPANKAR DATTA and Augustine George Masih, JJ.

Facts of the Case

The assessee challenged the renewal of provisional attachment of its bank accounts by the respondent after one year from the date of the original provisional attachment order under CGST and Gujarat GST. The assessee contended that the respondent had not disposed of objections raised against the original attachment order and that no statutory provision authorized renewal beyond the one-year period. The High Court held that provisional attachment orders cease to have effect after one year, but observed that authorities could renew the attachment upon recording satisfaction, noting that the assessee was allegedly engaged in fraudulent invoicing, resulting in revenue loss. The assessee appealed, seeking a declaration that renewal of a lapsed provisional attachment order without statutory backing was null and void. The matter was accordingly placed before the Supreme Court. 

High Court Held

The Hon’ble Supreme Court held that renewal of provisional attachment after the expiry of one year is invalid, as there is no statutory authority permitting such renewal, and allowing it would defeat the legislative intent of Section 83. The Court reasoned that granting power to the revenue to renew or reissue a lapsed provisional attachment order would render sub-section (2) of Section 83 otiose and exceed the statutory framework. Consequently, the impugned renewal orders had ceased to have effect by operation of law, and the bank accounts attached by the respondent were to be de-freezed and made operable forthwith. 

List of Cases Reviewed

• Kesari Nandan Mobile vs. Assistant Commissioner — (2025) 27 Centax 398 / [2025] 171 taxmann.com 774 (Guj.) — Reversed [Para 41]
• Radha Krishan Industries v. State of Himachal Pradesh — [2021] 127 taxmann.com 26/86 GST 665/48 G.S.T.L. 113 (SC) — Followed [Para 17}