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Puneet Chemicals Vs GSTO

Date: November 30, 2025

Court: High Court
Type: Writ Petition
Judge(s)/Member(s): PRATHIBA M. SINGH, RENU BHATNAGAR
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Subject Matter

Provisional Attachment of Bank Account Set Aside Due to Quashing of Underlying Demand Orders

Provisional Attachment

Summary

The petition is allowed. The provisional attachment of the petitioner's bank account, made under Section 83 of the CGST Act, is set aside. This decision is based on the fact that the underlying demand orders, which served as the basis for the attachment, were previously quashed and the matter remanded for fresh adjudication by the Court itself.

Summary of Facts and Dispute:
  1. Impugned Action: Provisional attachment of bank account no. 03312000003592 with HDFC Bank under Section 83 of the CGST Act, effected by a letter dated 11th September, 2025. This attachment stemmed from proceedings initiated under Section 73 of the CGST Act for financial years 2017-18, 2018-19, and 2019-20, leading to demands of Rs. 31,56,358.80/-, Rs. 31,33,406/-, and Rs. 6,46,094/- respectively.
  2. Petitioner's Argument: The petitioner contended that the provisional attachment was untenable because the High Court, via an order dated 26th November, 2025, had already set aside the demand for FY 2017-18 (Rs. 31,56,358.80/-) and remanded the case for fresh adjudication. An additional argument was that the attachment letter was issued by a GST Officer, not the Commissioner, which would also render it untenable.
  3. Core Question of Law: Whether a provisional attachment of a bank account under Section 83 of the CGST Act remains legally sustainable when the foundational demand orders, upon which the attachment was based, have been quashed and remanded for fresh adjudication by the Court.
Key Legal Issues & Findings:
Validity of Provisional Attachment Post-Quashing of Underlying Demand

The Court relied on its order dated 26th November, 2025, passed in W.P.(C) No. 16914/2025, which set aside the demand raised against the Petitioner and remanded the matter for fresh adjudication.

  • Basis of Attachment: The provisional attachment was primarily based on the demand orders issued following proceedings under Section 73 of the CGST Act.
  • Impact of Demand Quashing: As the main demand that triggered the provisional attachment was subsequently quashed by the Court and the matter sent for fresh adjudication, the provisional attachment order issued pursuant to such proceedings automatically loses its legal tenability and cannot stand independently.
  • Tenability of Attachment: An attachment designed to secure a demand cannot survive if the demand itself has been set aside, even if remanded for re-adjudication.
Ruling:
  1. Outcome: The provisional attachment order concerning bank account no. 03312000003592 with HDFC Bank is set aside.
  2. Directions: None explicitly stated for the officer, but implicitly the bank account should be unblocked.
  3. Liberty: The department is granted liberty to take appropriate action in accordance with law if any fresh order is passed against the Petitioner subsequent to the fresh adjudication proceedings.

FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT

1. This hearing has been done through hybrid mode.

CM APPL. 75138/2025

2. Allowed, subject to all just exceptions. The Application is disposed of.

W.P.(C) 18159/2025

3. The present petition has been filed by the Petitioner challenging, inter alia, the provisional attachment of the bank account no. 03312000003592 with HDFC Bank at branch BN- 11 Shalimar Bagh, New Delhi -110088 which had been attached under Section 83 of the Central Goods and Service Tax Act, 2017 (hereinafter, ‘CGST Act’).

4. By letter dated 11th September, 2025 issued by the Department of Trade & Taxes, GNCTD, Office of the GST Officer, New Delhi, the bank account of the Petitioner was attached. The said attachment appears to be based upon proceedings instituted against the Petitioner under Section 73 of the CGST Act which led to passing of certain orders that were the subject matter of the following three writ petitions:

Writ
Petition No.		 Financial
Year		 Date of
issuance of SCN		 Date of
passing of Order		 Demand
(in Rs.)
W.P.(C) 16914/2025 2017-18 23rd September, 2023 21st December,
2023		 Rs. 31,56,358.80/-
W.P.(C) 16745/2025 2018-19 18th December, 2023 3rd April, 2024 Rs. 31,33,406/-
W.P.(C) 17245/2025 2019-20 23rd May, 2024 10th August, 2024 Rs. 6,46,094/-

5. Out of the above three orders, dated 21st December, 2023, was challenged in W.P.(C) No. 16914/2025. In the said writ petition, vide order dated 26th November, 2025, this Court has already set aside the demand raised in the order against the Petitioner in the following terms:

“12. However, the delay is substantial and accordingly, this Court is of the opinion and following similar orders in other matters, the impugned orders deserve to be set aside subject to costs of Rs.10,000/- in each petition. The costs to be paid to the Sales Tax Bar Association on the following bank details:

    • Name: Sales Tax Bar Association
    • Account No.: 90672010003811
    • Bank Name: Canara Bank
    • IFSC: CNRB0019067
  • Name: Sales Tax Bar Association
  • Account No.: 90672010003811
  • Bank Name: Canara Bank
  • IFSC: CNRB0019067

13. The Petitioner is granted time till 10th January, 2026 to file replies to the impugned SCNs. Upon filing of the replies, the Adjudicating Authority shall issue to the Petitioner, a notice for personal hearing. The personal hearing notices shall be communicated to the Petitioner on the following mobile no. and e-mail address:

      • Mobile No.: 8527817330
      • E-mail Address : prannayjaiin@gmail.com
    • Mobile No.: 8527817330
    • E-mail Address : prannayjaiin@gmail.com
  • Mobile No.: 8527817330
  • E-mail Address : prannayjaiin@gmail.com

14. The reply filed by the Petitioner to the impugned SCNs along with the submissions made in the personal hearing proceedings shall be duly considered by the Adjudicating Authority and fresh reasoned orders with respect to the impugned SCNs shall be passed accordingly.”

6. In addition, it is also argued by Mr. Pranay Jain, ld. Counsel for the Petitioner that the GST Officer has issued the letter for provisional attachment, not the Commissioner, which would also make the said attachment untenable.

7. Be that as it may, in view of the above order of this Court dated 26th November, 2025, since the main demand raised against the Petitioner has itself been quashed by the Court and the matter has been remanded for fresh adjudication, the provisional attachment order issued pursuant to such proceedings would no longer be tenable. The said attachment order is accordingly set aside.

8. Needless to add, if any fresh order is passed against the Petitioner, the department is free to take action in accordance with law.

9. The petition is disposed of in said terms. Pending applications, if any, are also disposed of.