Page 29 - Bullion World Volume 4 Issue 9 September 2024

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or Commissioner of Customs, by order in writing, that the Board shall, within ninety days of the said
provisionally attach any bank account for a period not attachment, obtain confirmation of the said attachment
exceeding six months. Provided that the Principal from the Special Court, established under section 26A,
Commissioner of Customs or Commissioner of Customs having jurisdiction and on such confirmation, such
may, for reasons to be recorded in writing, extend such attachment shall continue during the pendency of the
period to a further period not exceeding six months and aforesaid proceedings and on conclusion of the said
inform such extension of time to the person whose bank proceedings, the provisions of section 28A shall apply:
account is provisionally attached, before the expiry of the Provided further that only property, bank account or
period so specified.” accounts or any transaction entered therein, so far as
if related to the proceeds actually involved in violation
c) Section 5 of the PMLA Act, 2002- Attachment of of any of the provisions of this Act, or the rules or the
property involved in money-laundering regulations made thereunder shall be allowed to be
attached.”
a. Provisional Attachment: The Director or an
authorized officer (not below the rank of Deputy Director) e) Section 281B of the Income Tax Act- Provisional
can provisionally attach property if they have reason to attachment to protect revenue in certain cases
believe, based on material in their possession, that:
• A person is in possession of proceeds of crime. 3. Such provisions have found their way into these
• These proceeds are likely to be concealed, legislations in order to safeguard public/investor/
transferred, or dealt with in a way that could frustrate revenue’s interest or to prevent the suspect from
confiscation proceedings. alienating the property or to prevent them from creating
third party interest etc. However, it is pertinent to note
b. Duration: The provisional attachment can last for up here that the powers of attachment bestowed on the
to 180 days from the date of the order. authorities that specifically deal with revenue like GST,
DGGI, DRI,SEBI, Customs & ED are much broader than
c. Conditions: No attachment order can be made that of Police. It is so because the bodies that deal with
unless a report has been forwarded to a Magistrate unearthing of financial crimes need such powers in order
under Section 173 of the CrPC, 1973/ Section 193 of to safeguard the interest of revenue/public/investor as it
the BNSS 2023, or a complaint has been filed by an is critical to the governance of our nation.
authorized person before a Magistrate or court.
4. Legislature while entrusting such powers to
d. Extension: If proceedings are stayed by the High the authorities, intended these powers to be used
Court, the period of stay is excluded from the 180 days, sparingly. However, on a lot of occasions, unsuspecting
and an additional period of up to 30 days can be counted businesses/ people find themselves at the receiving
after the stay is lifted end of the excesses of these investigating agencies.
Innumerable cases have come to light where authorities
d) Section 11 (4) of the SEBI Act, 1992- Functions of have mechanically frozen bank accounts thereby
Board “(4) Without prejudice to the provisions contained crippling operation of businesses. Often businesses
in sub-sections (1), (2), (2A) and (3) and section 11B, dealing with sensitive items like gold jewellery & bullions,
the Board may, by an order, for reasons to be recorded in precious stones, fall prey to this departmental high-
writing, in the interests of investors or securities market, handedness. It is precisely for such cases; various
take any of the following measures, either pending instructions have been issued from time to time by the
investigation or inquiry or on completion of Authorities. For instance, CBIC vide their Instructions
such investigation or inquiry, namely:- … (e) attach, dated 23.02.2021, have formulated Guidelines on
for a period not exceeding ninety days, bank accounts Provisional Attachment of Property under GST so that
or other property of any intermediary or any person the process is streamlined and undue hardship is not
associated with the securities market in any manner caused to the assesses. However, more often than not,
involved in violation of any of the provisions of this Act, or such instructions are lost in translations and are neither
the rules or the regulations made thereunder: Provided followed in letter, nor in spirit.

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