Section 83 of CGST Act, 2017 : Section 83: Provisional Attachment To Protect Revenue In Certain Cases

Explanation using Example

Imagine a business owner, Mr. Sharma, who is under investigation for not paying the correct amount of GST. The authorities, while conducting proceedings under Section 67 (which deals with the power of inspection, search, and seizure), discover evidence that suggests Mr. Sharma may have been evading taxes on a large scale. The Commissioner of GST believes that Mr. Sharma might dispose of his assets to thwart the recovery of the tax dues.

To safeguard the government's interest and ensure that there are sufficient assets to recover any potential tax dues, the Commissioner decides to provisionally attach Mr. Sharma's property and bank accounts. This provisional attachment is made by an order in writing and is done following the prescribed manner under Section 83(1) of the Central Goods and Services Tax Act, 2017.

As per Section 83(2), this provisional attachment would last for one year from the date the order was issued, after which it would cease to have effect unless extended by due process. This means Mr. Sharma's assets would remain attached and he cannot sell or dispose of them during this period, thereby securing the government’s potential tax revenue.