This week in Indian law: The Bombay High Court ruled that provisional attachment of bank accounts under Section 83 of the CGST Act ceases automatically after one year. SEBI amended mutual fund regulations to introduce a comprehensive ESG scheme framework. High Courts and regulators continue to drive legal news during the Supreme Court's summer vacation. 2 significant legal developments this week across high-court-judgments and securities-market.
Top story
Bombay HC: CGST Section 83 Attachment Ceases After One Year
Category: high-court-judgments | Date: 15 June 2023 | Source: Bombay High Court
The Bombay High Court held that provisional attachment of bank accounts under Section 83 of the Central Goods and Services Tax (CGST) Act, 2017 automatically ceases after one year from the date of the attachment order. The Court ruled that the GST department cannot renew, extend, or issue fresh attachment orders for the same period without completing the underlying assessment. The judgment provides significant relief to businesses whose bank accounts have been frozen by GST authorities, often for extended periods exceeding the statutory one-year limit.
Why it matters: This ruling provides a definitive legal basis for challenging prolonged GST bank account freezes, which have been causing severe cash flow disruptions for businesses. GST practitioners should immediately review all pending Section 83 attachments exceeding one year.
Read more: Veritect analysis
Regulatory updates
SEBI Amends Mutual Fund Regulations for ESG Scheme Framework
Date: 20 June 2023
SEBI amended the SEBI (Mutual Funds) Regulations, 1996 to introduce a comprehensive framework for Environmental, Social, and Governance (ESG) mutual fund schemes. Key provisions include mandatory third-party ESG assurance for schemes using ESG labels, enhanced disclosure of ESG scoring methodologies and portfolio-level ESG metrics, restrictions on the use of ESG terminology in scheme names without meeting minimum investment criteria, and a new sub-category structure for ESG schemes.
Key point: Mutual fund houses offering or planning ESG schemes must comply with the new third-party assurance and disclosure requirements; greenwashing through ESG labels without substance will attract regulatory scrutiny.
Also this week
- SC summer vacation continues — Limited bench hearings; Manipur situation monitored.
- Parliament not in session — Monsoon session preparations underway; expected to commence mid-July.
- No significant RBI or MCA developments — Routine regulatory operations.
Looking ahead
- June 22: SEBI expected to issue master circular for debt securities listing obligations.
- Late June: SC vacation bench to hear bail matters; limited judicial activity.
- July: Supreme Court resumes; Parliament Monsoon session begins. Major legislative activity expected including Delhi Ordinance conversion to Act.
This is the Veritect Weekly Legal Roundup for Week 24 of 2023. For daily updates, visit our legal news page. Subscribe to receive this roundup every Monday morning.
Veritect provides this content for informational purposes and does not constitute legal advice.