🧾 Bank Account Attachment under GST: Legal Framework, Procedure, and Judicial Safeguards

🔍 Introduction

Under the Goods and Services Tax (GST) regime, the provisional attachment of bank accounts is one of the most powerful tools available to tax authorities. However, such power is not unfettered. It must be exercised with strict adherence to statutory provisions, procedural safeguards, and judicially endorsed principles.

This article offers a comprehensive analysis of:

• The legal foundation of provisional attachment under GST,

• The detailed procedure prescribed under the law,

• Key judgments shaping the scope of this power, and

• Practical strategies for challenging wrongful attachment.

⚖️ Legal Provision: Section 83 of the CGST Act, 2017

✅ Statutory Text (As amended w.e.f. 01.01.2022)

"Where, after the initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue, it is necessary so to do, he may, by order in writing, attach provisionally any property, including bank account, belonging to the taxable person or any person specified in section 122(1A), in such manner as may be prescribed."

✅ Duration: Section 83(2)

"Every such provisional attachment shall cease to have effect after the expiry of one year from the date of the order."

📚 Applicable Chapters for Invocation of Section 83

Chapter	Scope	Sections
Chapter XII	Assessment	59–64
Chapter XIV	Inspection, Search, Seizure & Arrest	67–72
Chapter XV	Demand and Recovery	73–84

❌ Note: Chapter XIII (Audit) and Section 70 (Summons) are not covered under Section 83. Attachment based solely on audit or summon is legally invalid.

🧾 Procedural Framework: Rule 159 of CGST Rules, 2017

Step-by-Step Procedure:

1. Form GST DRC-22: Order of provisional attachment must be issued in writing.

2. Intimation: Order must be sent to the taxpayer and the authority maintaining the property (bank, RTO, registrar, etc.).

3. DRC-22A: Affected person can file an objection without any fixed time limit (amended).

4. Personal Hearing: Mandatory before confirming attachment.

5. Form GST DRC-23: Order for release of property — either after objection or suo motu.

6. Automatic Expiry: Attachment lapses after 12 months under Section 83(2).

🏛️ Key Judicial Pronouncements

✅ Radha Krishan Industries v. State of HP (SC, 2021)

• Section 83 is a draconian power and must be used sparingly.

• Requires tangible material and written, reasoned order.

✅ SG Plastics v. Union of India (Allahabad HC, 2022)

• Attachment order was quashed due to non-service of DRC-22 on the taxpayer.

✅ Kaish Impex Pvt. Ltd. v. UOI (Bombay HC, 2020)

• Emphasized proportionality and business continuity. Attachment must not paralyze operations.

✅ Amazonite Steel Pvt. Ltd. v. UOI (Calcutta HC, 2020)

• Held that no proceedings = no power to attach.

🔗 GST Data Sharing with Income Tax Department

📌 Legal Basis: Section 158A of CGST Act (w.e.f. 01.10.2023)

• Enables consent-based sharing of GST data with other authorities.

• Shared with CBDT, FIU, DRI, and RBI.

⚠️ Risk Scenarios:

GST Disclosure	Income Tax Trigger
Turnover mismatch (GSTR vs ITR)	Reopening under Section 148
High ITC claim, low profit	Scrutiny under Section 143(2)
Frequent e-way bills	Stock audit / Survey action

✅ What To Do If Your Bank Account Is Attached

Step-by-Step Legal Response:

1. Obtain Form DRC-22.

2. Check for valid proceedings under Chapters XII, XIV, or XV.

3. File objection in DRC-22A.

4. Request hearing (mandatory).

5. Move High Court under Article 226 if:

   
   

   • No pending qualifying proceeding,

   • Proportionality violated,

   • DRC-22 not served,

   • Attachment continues beyond 12 months.

📑 Documentation Checklist

• Copy of DRC-22

• GST returns (GSTR-3B, GSTR-1, GSTR-9)

• Correspondence with department

• Bank statements

• Proof of ongoing proceedings (if any)

🧠 Conclusion

Provisional attachment under GST is not an automatic or discretionary tool. It is a regulated legal measure that must satisfy statutory triggers, procedural mandates, and judicial standards.

Taxpayers must remain vigilant and:

• Reconcile GST and ITR data,

• Respond quickly to attachment orders,

• Assert procedural rights, and

• Seek constitutional remedies where needed.

📤 Need Assistance?

If your bank account has been attached under GST or you’ve received Form DRC-22, consult a qualified legal expert immediately. We assist with:

• Filing objections,

• Drafting replies and representations,

• Writ petitions before High Courts.