GST · Notices, demands and appeals
Can the GST department attach my bank account, and what can I do about it?
Short answer
Yes. Under section 83, the Commissioner can provisionally attach a bank account or other property while proceedings such as an audit, inspection or demand are pending, if he believes it is needed to protect revenue. The attachment lapses after one year. You can object within 7 days and must be heard. Separately, after a demand is confirmed and unpaid, the officer can recover it directly from your bank under section 79.
Two different powers
| Provisional attachment (section 83) | Recovery (section 79) | |
|---|---|---|
| When | During proceedings (scrutiny, audit, inspection, search, demand), before any final demand | After a demand is confirmed and not paid, usually after three months |
| Purpose | To protect revenue that may become due | To recover tax that is due |
| Form | Order in DRC-22 to the bank | Notice in DRC-13 to the bank |
| How long | Lapses one year from the order | Until the dues are paid |
Limits on section 83
The Supreme Court held in Radha Krishan Industries (2021) that provisional attachment is a drastic power:
- the Commissioner must form his own opinion, based on tangible material, that attachment is necessary to protect revenue;
- there must be a real link between the proceeding and the likely liability;
- the person must be given a hearing on objections, and a reasoned decision.
What to do
- Get the order from the bank or the officer and note its date.
- File objections within 7 working days under rule 159(5). Show that the attachment is not necessary: for example, the business is running, the demand is weak, or you can offer other security.
- Ask for a personal hearing, and keep a record of it.
- Offer alternatives, such as a bank guarantee or attachment of a specific asset, so that operations can continue.
- If the order has no reasons or no hearing is given, a writ petition in the High Court is the usual remedy.
The officer must release the property in DRC-23 when the proceedings end, or earlier if satisfied.
For a confirmed demand
If the demand is confirmed, file an appeal with the pre-deposit (10% of the tax in dispute, up to the limits). Recovery of the balance is then stayed. See the first appeal and pre-deposit.
Legal basis
- Sections 79 and 83, Central Goods and Services Tax Act, 2017
- Rule 159, CGST Rules, 2017 (forms DRC-22 and DRC-23)
- Radha Krishan Industries v. State of Himachal Pradesh, Supreme Court, 2021
Official sources
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