Bank Account Frozen by GST Department: How to Respond?

, Last updated: 24 November 2025
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Rule 159 read with section 83 of the CGST Act, officers have the power to provisionally attach bank accounts to protect revenue.This section provides the legal basis for the Commissioner to order such attachments if they believe it is necessary to safeguard the interests of the revenue during the pendency of certain GST proceedings (such as inspection, investigation, or assessment).

Bank Account Frozen by GST Department: How to Respond

The Common Triggers:

Non-filing of GST Returns

GSTR-3B or GSTR-1 pending for multiple months
Repeated defaults despite notices

Excess ITC Claim

ITC claimed without proper invoices
Wrong ITC under Rule 36(4)
ITC mismatch with suppliers

Suspicion of Fake Transactions

Mismatched turnovers
Bogus billing or circular trading red flags

Tax Dues Not Paid

Outstanding liability
Ignoring DRC notices

Ongoing Investigation

Enforcement action by DGGI
Fraud/evading tax suspicion

How Do You Know If Your Account Is Frozen?

You may receive:

DRC-22 order (Provisional Attachment) on GST portal
Email/SMS from GST department
Intimation from your bank
Trouble while making withdrawals or UPI transactions

Always check Services → User Services → View Notices & Orders for DRC-22.

What To Do When Your Bank Account Is Frozen ?(Step-by-Step Guide)

Download the DRC-22 Order

This document specifies:

Reason for attachment
Officer details
Legal sections invoked

You will need this for your reply.

File an Objection Under Rule 159(5) - Form DRC-22A

You have the right to object.

How to file:

GST Portal → Services → User Services → "Provisional Attachment → File Objection"

Mention:

Why the attachment is unjustified
How it affects business survival
Evidence of compliance
Request immediate release

Attach All Supporting Documents

Submit documents such as:

Copies of filed returns
Payment challans for GST dues
Reconciliations for ITC claim
Ledger statements
Proof of genuine business activity
CA/consultant explanation letter

This strengthens your case.

Communicate with the Jurisdictional Officer

Email or visit the officer handling your case.

Provide documents
Explain your business impact
Seek early disposal of DRC-22A

Request a Partial Release (If Needed)

If dues exist, you can request:

Release of account except the disputed tax amount
Permission to operate for salaries/critical payments

Often granted if the case is small or documentation is clean.

Receive the DRC-23 Order (Unfreeze Order)

If the officer is satisfied, a DRC-23 order is issued to your bank.

Once the bank receives it, the freeze is lifted within 24-48 hours

How Long Does It Take to Unfreeze?

Simple compliance issues: 1-3 days
ITC mismatch cases: 3-7 days
Investigation cases: Depending on the officer.

What Powers Does the Officer Actually Have?

Powers (Under Section 83 read with Rule 159):

Attach any movable/immovable property (includes bank account, factory, land, vehicles, stocks).
Restrict the taxpayer from using attached property.
Direct banks to stop account operations.
Retain the attachment for 1 year.
Seek information from banks/authorities about the taxpayer's assets.

But these powers are NOT unlimited. Officer must:

Record reasons in writing.
Act only during specified proceedings.
Follow due process under Rule 159.
Allow objection filing (DRC-22A).
Provide a hearing opportunity.
Pass a speaking order on the objection.
Issue DRC-23 if releasing.

Key Takeaways

Bank account freezing is legally allowed under Section 83, but can be contested.
You must file DRC-22A to challenge the attachment.
Good documentation and timely returns speed up unfreezing.
Most cases get resolved within a few days if handled correctly.