Legal Remedies for Removing GST Bank Account Attachments

To request the removal of a GST bank account attachment, you can pursue different methods depending on the circumstances of your case:

1. Filing a Formal Objection (FORM GST DRC-22A) Under Rule 159(5) of the CGST Rules, you have the right to file an objection using FORM GST DRC-22A stating that the attached bank account is not liable for attachment.

• Requesting Reasons for Attachment: To make your objection effective, you can legally request the commissioner to furnish a certified copy of the opinion or reasons they recorded for attaching the account. Without knowing the reasons, you cannot properly raise an objection, a principle upheld by the Bombay High Court in the Originative Trading Private Limited case.

• Once the objection is filed, the Commissioner must give you an opportunity to be heard, and if satisfied, they will release the bank account by issuing an order in FORM GST DRC-23.

2. Filing an Appeal with a 10% Pre-Deposit If your bank account was attached to recover a pending tax demand (such as an order in FORM DRC-07), you can file an appeal before the Appellate Authority under Section 107 of the CGST Act.

• By making a mandatory pre-deposit of 10% of the disputed tax amount under Section 107(6), the recovery proceedings for the balance amount are automatically deemed to be stayed under Section 107(7).

• Once the appeal is filed and the pre-deposit is made, the bank attachment comes to an end. You can submit a letter to the State Tax Officer providing proof of your appeal (APL-01) and pre-deposit, requesting they formally remove the attachment. Multiple High Courts (such as in the cases of Skylight Manpower, Unity Traders, and Maxtile AAC Block) have affirmed that an attachment must be de-freezed immediately upon the 10% pre-deposit.

3. Expiry of the One-Year Limitation Under Section 83(2) of the CGST Act, a provisional attachment of a bank account is only valid for one year from the date the order was made.

• Every provisional attachment automatically ceases to have effect after the expiry of this one-year period.

• The department cannot simply issue a "renewal" or re-attach the account on the same grounds after the year has expired. The Supreme Court confirmed in the Kesari Nandan Mobile case that any fresh provisional attachment orders issued after the previous ones have lapsed by operation of law are invalid, and the accounts must be de-freezed. If your attachment is older than a year, you can submit a letter requesting immediate removal based on this limitation.

Relevant Judgements:

1. Originative Trading Pvt. Ltd. vs Union of India – Bombay High Court [(2022) 65 GSTL 144 (Bom.)]

A copy of the provisional attachment order in FORM GST DRC-22, issued under Section 83 of the CGST Act and freezing the bank account of the assessed party, must be communicated to the bank initially. It is not necessary to inform the assessed party of the reasons for issuing the provisional attachment order of the bank account. However, a certified copy of the prima facie opinion formed by the Commissioner prior to issuing the provisional attachment order in FORM GST DRC-22 must be provided to the assessed party to facilitate their opportunity to lodge objections.

2. Skylight Man Power and Hospitality Services vs Commissioner, State Taxes and Excise – Himachal Pradesh High Court [(2023) 71 GSTL 6 (HP)]

Where a bank account, debtors and immovable property were provisionally attached, the same were required to be released on pre-deposit of the tax demand at the time of filing the appeal.

3. Unity Traders vs Principal, Additional Director, DGGI – Delhi High Court [(2025) 31 CENTAX 101 (Del.)]

When an appeal is lodged against a final order and the execution of that order is stayed, the directive to freeze bank accounts is consequently also stayed, and the accounts are to be subsequently unfrozen.

4. Tvl. Maxtile AAC Block vs State Tax Officer – Madras High Court [(2024) 87 GSTL 417 (Mad.)]

Where the assessee made the requisite pre-deposit of 10% of the disputed tax demand as per Section 107 while filing an appeal, recovery proceedings in respect of the balance amount should be deemed to be stayed; since the respondent authority had attached the immovable property of the assessee even before the expiry of the statutory period of three months, the respondent should release the said attachment.

5. Kesari Nanadan Mobile vs Office of Assistant Commissioner of State Tax – Supreme Court [(2025) 33 CENTAX 224 (SC)]

Where provisional attachment was renewed after one year, since renewal has no statutory backing and permitting it would defeat legislative intent, such renewal orders were invalid, and the assessee’s bank account was to be de-freezed forthwith.