CBIC Notifies Procedure When Provisional Attachment Of Property Ceases To Have Effect

The Central Board of Indirect Taxes and Customs (CBIC) has notified the procedure to be followed with respect to section 83(2) of the CGST Act, 2017 when provisional attachment of property ceases to have effect.

“Keeping in view the convenience of taxpayers, the Board prescribes the procedure that in such types of situations, the Commissioner shall issue communication/an intimation to the concerned authority/bank, drawing attention to the particulars of the Order/Form DRC-22 (which made the provisional attachment) and the provisions of section 83 (2) of the CGST Act, 2017, and further indicating the release/restoration of the relevant property/account, in terms of those provisions. This intimation shall be copied to the person concerned. This procedure be implemented immediately, including for dealing with similar pending cases,” the advisory read.

Section 83 has the provisions to issue orders for provisional attachment of property, including bank account, to protect interests of revenue in appropriate cases. At present, the procedure for provisional attachment and release/restoration of property is prescribed in rule 159 of CGST Rules, 2017.

Section 83(2) of CGST Act, 2017 states - "Every such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the order made under subsection (1).”

Where the provisions apply, say in the provisional attachment of a bank account, there are instances noticed where the person concerned filed a writ petition seeking that the Commissioner should also follow up by issuing intimation of the release of such provisional attachment because Banks/relevant authorities ask for such communication. The matters have come up before the Delhi High Court.

The matter has been examined in consultation with the policy wing. It is noted that in terms of the legal position of said section 83(2), read with rule 159, in effect, the property is no longer liable to provisional attachment. However, it requires further consultation and actions to incorporate a prescribed language for such a type of release/restoration of provisional attachment in a specified Form (like GST DRC-23).

GST/INV/ProvisionalAttachment/Advisory/2023-24

Date: 02/09/2023

Click Here To Read The Advisory