Provisional GST Attachment Ends When Final Order Under Section 74 Is Passed

The Rajasthan High Court in Cyberpoint Private Limited Vs Commissioner of Central Goods And Service Tax has reaffirmed an important principle regarding provisional attachment of bank accounts under the Central Goods and Services Tax framework. Once a final order under Section 74 of the CGST Act is issued, any provisional attachment earlier imposed under Section 83 automatically loses effect and cannot continue.

This position was not independently evolved by the Rajasthan High Court; rather, it rests squarely on the binding authority of the Supreme Court’s order dated 03.03.2025 in Om Prakash Gupta versus Principal Additional Director General, read together with the earlier decision in M/s Radha Krishan Industries versus State of Himachal Pradesh & Ors.

Background of the Dispute

In the matter before the Rajasthan High Court, Cyberpoint Private Limited had approached the Court challenging a provisional attachment of its bank account ordered by the GST authorities. The attachment had been made in exercise of powers under Section 83 of the Central Goods and Services Tax Act, 2017.

Counsel representing Cyberpoint Private Limited, led by Mr. Siddharth Ranka, Advocate and assisted by Ms. Satvika Jha, Advocate, and counsel appearing for the GST department both acknowledged that the legal issue at the core of this appeal was already covered by the Supreme Court’s judgment in Om Prakash Gupta versus Principal Additional Director General, SLP Appeal (C) No(s).28903 of 2024, decided on 03.03.2025.

Supreme Court’s Decision in Om Prakash Gupta

The High Court reproduced and relied on the observations of the Supreme Court in Om Prakash Gupta versus Principal Additional Director General, where the apex court considered a challenge to a provisional attachment of bank accounts under Section 83 of the CGST Act.

Key Facts Before the Supreme Court

  1. The assessee in that case had challenged before the High Court an order of provisional attachment of its bank account passed by the Commissioner under Section 83 of the CGST Act.
  2. The High Court had declined to interfere and dismissed the challenge.
  3. The assessee then approached the Supreme Court by way of Special Leave Petition, contesting the legality and validity of the provisional attachment.
  4. By the time the matter came up before the Supreme Court, it was pointed out that a final order under Section 74 of the CGST Act had already been passed by the competent authority in the interim. The assessee was in the process of challenging that final order in accordance with the statutory scheme.

Supreme Court’s Reasoning

The Supreme Court, while disposing of the Special Leave Petition, made the following crucial points: