HC Quashes Bank Account Attachment for Lack of Valid Section 74 Proceedings

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  • Last Updated on 24 October, 2025

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Bank account attachment

Case Details: Soraza Recycling (P.) Ltd. vs. Union of India - [2025] 179 taxmann.com 104 (Allahabad)

Judiciary and Counsel Details

  • Shekhar B. Saraf & Praveen Kumar Giri, JJ.
  • Nishant Mishra & Vedika Nath for the Petitioner.
  • Dhananjay Awasthi, Krishna Agarawal, Krishna Mohan Asthana, Saumitra Singh & Maneesh Mehrotra for the Respondent.

Facts of the Case

The petitioner, a registered taxpayer under the CGST Act, challenged the provisional attachment of its bank accounts under Section 83 of CGST Act. The attachment was imposed solely on the basis of an assertion that proceedings under Section 74 of CGST Act had been initiated, despite no formal initiation of such proceedings or presentation of tangible material. It was contended that the attachment lacked a reasoned opinion and any direct connection to material facts justifying the protection of government revenue. The matter was accordingly brought before the High Court.

High Court Held

The High Court held that Section 83 of the CGST Act requires a reasoned opinion supported by tangible evidence before provisional attachment can be ordered to protect government revenue. It was observed that the attachment notices contained only unsupported assertions about proceedings under Section 74, without any formal initiation or substantiated reasons. It was concluded that the attachments were arbitrary, perverse, and lacked legal foundation. Thus, the provisional attachment notices and directed the release of the bank accounts were quashed, while granting the Department of Revenue liberty to initiate fresh proceedings.

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied