Provisional bank account attachment automatically lapses after one

Provisional bank account attachment automatically lapses after one year and cannot be freshly extended.

Issue

Whether a provisional bank account attachment order issued under Section 83 of the CGST/KGST Act can legally subsist or be freshly extended on the same cause of action beyond the mandatory statutory period of one year.

Facts

A provisional attachment order under Section 83 was passed by the tax authority against the petitioner’s bank account on May 2, 2024.
The petitioner filed a writ petition challenging the continued operation and validity of the attachment beyond its one-year statutory deadline.
The petitioner relied on the binding Supreme Court precedent in Kesari Nandan Mobile v. Office of Asstt. Commissioner of State Tax [2025].
The case established that the one-year lifespan of a provisional attachment is a rigid statutory ceiling that cannot be extended under the same cause of action.

Decision

The issue is decided entirely in favor of the assessee, and the writ petition is allowed.
It was held that, relying on the Supreme Court’s ruling in Kesari Nandan Mobile, a provisional attachment order automatically lapses by operation of law upon the expiry of one year.
The court ruled that the specific provisional attachment order dated May 2, 2024, ceased to subsist after its one-year term.
The tax authority is directed to lift the attachment, and the petitioner is declared entitled to operate the bank account normally, in the absence of any other lawful pending proceedings.

Key Takeaways

Strict One-Year Statutory Lifespan: A provisional attachment order issued under Section 83 has a hard expiration date of exactly one year from the date of the order, after which it becomes legally dead.
No Sequential Re-attachment: Tax authorities are strictly prohibited from issuing a fresh, successive provisional attachment order on the exact same cause of action simply to bypass the one-year statutory limitation.
No Approvals Needed Post-Lapse: Taxpayers are not legally required to approach High Courts to seek explicit lifting orders once the one-year timeframe has lapsed, as the removal of the attachment is automatic.

HIGH COURT OF KARNATAKA

Sultan Mahmood Khan

Commercial Tax Officer

B.M. Shyam Prasad, J.

WRIT PETITION NO. 11328 OF 2026 (T-RES)

JUNE 16, 2026

Shreehari Kutsa, Adv. for the Petitioner. K. Hema Kumar, AGA for the Respondent.

ORDER

1. The petitioner has called in question the Provisional Attachment Order dated 02.05.2024 [Annexure-B] under Section 83 of the Central Goods and Services Tax Act/Karnataka Goods and Services Tax Act, 2017 [for short, ‘the Act’]. The petitioner’s grievance is with the order subsisting beyond the one year contemplated under Section 83 of the Act. The reliance is upon the Apex Court’s Judgment in Kesari Nandan Mobile v. Office of Asstt. Commissioner of State Tax 111 GST 387/101 GSTL 177 (SC)/2025 SCC OnLine SC 2075.

2. Sri Shreehari Kutsa, the learned counsel for the petitioner, and Sri K Hemakumar, a learned Additional Government Advocate, who accepts notice for the respondents, are heard for disposal of the petition. This Court must observe that with the Apex Court’s decision in the case of Kesari Nandan Mobile [supra] two propositions are beyond dispute. The first proposition is that the Provisional Attachment Order will have to lapse after the statutory period of one year and that the concerned must not be compelled to approach High Courts for lifting of the Provisional Order. The second proposition is that after the lapse of the Provisional Attachment Order with the lapse of one year, there cannot be another attachment order.

3. This Court must refer to paragraphs 30 and 36 of the Apex Court’s Judgment, which read as under:

“30. That apart, having regard to the draconian nature of power conferred on the Revenue by sub-section (1) of section 83 of the CGST Act to levy a provisional attachment, the terms of the entire section have to be construed in a manner so that sub-section (2) of section 83 is not effectively reduced to a dead letter. We are reminded of the maxim ut res magis valeat quam pereat. It is an interpretive doctrine that a legal text, specially a statute, should be interpreted in a way that gives the document force rather than makes it fail. Conceding power to the Revenue to issue a fresh provisional order of attachment after the initial order has lapsed by operation of law or to renew the same would render the text of sub-section (2) of section 83 otiose and accepting the reason assigned by the Gujarat High Court would permit the Revenue to exercise a power which is not the statutory intendment. We, therefore, see no reason to read section 83 in a manner to confer any additional power over and above the draconian power conferred by sub-section (1) and upon lapse as ordained by sub-section (2).

36. It would seem rather incongruous and redundant that parties must approach the High Courts to seek enforcement of a law already in force. The deliberate non-compliance by the Revenue to implement statutory protection would undermine the rule of law and render the action not only susceptible to vulnerability but also being set at naught.”

4. In the light of the afore, the petitioner must succeed in the challenge against the Order dated 02.05.2024 and with the observation that the petitioner will be entitled to operate its account unless there are other proceedings.

5. The petition is allowed accordingly.