Background:
Section 83 of the CGST Act empowers the Commissioner to provisionally attach property, including bank accounts, to protect the interest of revenue during the pendency of specified proceedings. Rule 159 prescribes that the order of attachment is to be issued in FORM GST DRC-22, that the person may file an objection within seven days, and that the Commissioner, after affording an opportunity of being heard, may release the property by an order in FORM GST DRC-23 if satisfied that it was not liable to attachment. The rule, however, did not prescribe any form or manner for rejecting an objection; rejections were communicated through letters, often without reasons, which the courts (including the Supreme Court in Radha Krishan Industries, 2021) criticised while holding that the power of provisional attachment is drastic and must be exercised with strict adherence to procedure and recording of reasons.
In line with the 57th GST Council’s emphasis on common standards and transparency in notices and proceedings, the rule has been amended to prescribe a formal order for disposal of objections.
What the Notification provides:
Now, the CBIC vide Notification No. 05/2026-Central Tax dated 26.10.2026 has amended Rule 159 as under:
- Rule 159(1): The order of provisional attachment shall be issued in “Part A of” FORM GST DRC-22.
- Rule 159(5): After affording the person filing the objection an opportunity of being heard, the Commissioner may either reject the application in “Part B of FORM GST DRC-22”, if not satisfied with the submissions, or release the property by order in FORM GST DRC-23 if satisfied that the property was not liable to attachment.
FORM GST DRC-22 has been restructured accordingly, with Part A for the attachment order and Part B for the reasoned order rejecting the objection.
Effective date:
The amendment is effective from 1st November, 2026. Taxpayers whose property or bank accounts are provisionally attached will henceforth receive a formal order in Part B of DRC-22 where their objection is rejected, which can be challenged on the reasons stated therein.
The Notification can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/10/CBIC-NN-05-2026–Central-Tax.pdf
