After a long wait of 6 years, GST Council has finally recommended automatic restoration of provisionally attached property after expiry of 1 year without need of a specific and separate order from GST Authorities for release.

In this span of 6 Years, many taxpayer have spent their good time and resources for lifting of provisional attachments, which were originally imposed by GST Authorities as a safeguard on temporary basis for limited period of one year.

Though sub-section (2) of Section 83 of CGST Act, 2017 contains a provision since beginning of GST that provisional attachment shall cease to have effect after expiry of 1 year from the date of order. But still there was no automatic restoration of provisional attached property. 

83. (1) Where during the pendency of any proceedings under section 62 or section 63 or section 64 or section 67 or section 73 or section 74, 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 in such manner as may be prescribed.

(2) 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 sub-section (1).

A formal & specific order of release is generally required from the GST Authorities to get the property or bank account released by the taxpayer. And that is the situation where taxpayers spend their time and resources to get that specific order. In past, many taxpayers have to approach High Courts through writ petitions for removal of provisional attachment even after expiry of 1 year. 

The need of this specific release order had created a situation of extended and prolonged attachments for taxpayers even after the prescribed period of 1 year.  

Now, the GST Council in its meeting held on 07th Oct 2023, has recommended an amendment in sub-rule (2) of Rule 159 of CGST Rules, 2017 and FORM GST DRC-22 to provide that the order for provisional attachment in FORM GST DRC-22 shall not be valid after expiry of one year from the date of the said order. This will facilitate release of provisionally attached properties after expiry of period of one year, without need for separate specific written order from the Commissioner.

iii) Provision for automatic restoration of provisionally attached property after completion of one year: The Council has recommended an amendment in sub-rule (2) of Rule 159 of CGST Rules, 2017 and FORM GST DRC-22 to provide that the order for provisional attachment in FORM GST DRC-22 shall not be valid after expiry of one year from the date of the said order. This will facilitate release of provisionally attached properties after expiry of period of one year, without need for separate specific written order from the Commissioner.

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