The Delhi High Court has reiterated that a provisional attachment under Section 83 of the Central Goods and Services Tax Act, 2017, ceases to have effect after one year from the date of the attachment order.
The bench of Justice Anil Kshetarpal and Justice Bharat Parashar declined to issue a separate direction for the immediate release of ₹57.89 lakh taken into custody during a GST search, noting that the money had subsequently been deposited into the taxpayer’s bank account, which remained provisionally attached.
Buy Now: 210+ GST Judgments E-Magazine – October 2026
The Bench granted the taxpayer liberty to challenge the attachment through the statutory objection mechanism under Rule 159(5) of the CGST Rules, 2017 and directed the competent authority to decide the taxpayer’s pending representation seeking the return of seized documents and electronic devices within one month. The order was passed on October 27, 2026.
The proceedings arose from a search conducted on December 22, 2025, during which cash amounting to ₹57,89,500, documents and electronic devices were taken into custody.
According to the allegations recorded in the order, the petitioner company’s director was operating three fake firms to generate fraudulent input tax credit. The director was arrested on February 5, 2026, and granted bail on April 7, 2026.
These allegations formed the background to the proceedings. The High Court did not determine their correctness in this order.
The cash taken into custody during the search was deposited into the company’s bank account on December 29, 2025. That account stood provisionally attached under an order dated December 26, 2025, issued in Form GST DRC-22 under Section 83(1) of the CGST Act.
The company approached the High Court seeking a declaration that the seizure of cash was unlawful, without jurisdiction and beyond the scope of Section 67 of the CGST Act.
It also sought the quashing of the provisional attachment order and the release of documents and electronic devices seized pursuant to orders dated December 22, 2025, issued in Form GST INS-02 under Rule 139(2) of the CGST Rules.
The petition therefore challenged both the original taking of the cash into custody and the attachment of the bank account into which the amount was subsequently deposited.
The High Court observed that the company had a statutory remedy against the provisional attachment by filing objections in Form GST DRC-22A under Rule 159(5).
The Bench expressly left the company free to pursue that remedy and raise all grounds available in law against the attachment.
Given the subsequent deposit of the cash into the company’s account and the subsisting provisional attachment, the Court issued no separate direction for release of the amount at that stage.
The order did not uphold the legality of the original cash seizure or decide the merits of the attachment.
The Bench clarified that Section 83(2) limits the duration of a provisional attachment, stating that it “shall cease to have effect upon the expiry of one year from the date of the attachment order.”
The clarification concerned the statutory duration of the attachment. The Court did not direct immediate de-attachment through its October 27 order.
The ruling thus left the taxpayer free to contest the attachment through the prescribed objection process while recording the statutory limit on its operation.
Regarding the seized documents and electronic devices, the Court noted that the company had already submitted a representation dated May 16, 2026, seeking their release.
The Bench directed the first respondent to ensure that the competent authority considered and decided the representation, in accordance with law, within one month from the date of the order.
This direction required the authority to decide the request; it did not amount to an unconditional order to return the seized material.
The High Court expressly refrained from expressing any opinion on the merits of the provisional attachment or the company’s entitlement to release of the seized documents and electronic devices.
The writ petition and pending applications were disposed of with these observations and directions.
Membership Required to Access Case Details & Order Copy
To view the complete Case Details and Download Order Copy, you must have an active membership. Please subscribe to continue.
