2015 (1) TMI 275 - HC - VAT and Sales Tax

Prayer relating to raising of the attachment and release of the bank accounts - Attachment of bank account Recovery of sales tax dues by Department Held that - The Petitioners claim that they are not dealers under either of the Maharashtra Value Added Tax Act, 2002 and the Central Sales Tax Act, 1956 - the figure as derived have not been confirmed in its entirety by the ACST(Investigation)-15, Mumbai - the Accounts with the Banks, which are added as Respondents 4 to 8, shall be released from attachment, provided the Petitioners maintain the balance or the sum of ₹ 10,00,00,000/- in their Bank Account with the ICICI Bank Ltd. decided partly in favour of petitioner.

Issues:
1. Freezing and attachment of bank accounts to recover sales tax dues under Maharashtra Value Added Tax Act, 2002 and the Central Sales Tax Act, 1956.
2. Challenge against demand orders and the need for requisite details and documents to file appeals.
3. Securing tax liability and releasing bank accounts from attachment.
4. Disputed amount of tax liability and deposit made by the Petitioners.
5. Conditions for releasing bank accounts and maintaining a specified balance.
6. Filing statutory appeals and obtaining interim reliefs within a specified period.
7. Consequences if appeals are not filed or interim orders are not obtained.
8. Opportunity for the Petitioners to argue for interim reliefs.
9. Undertaking to make good any deficit in the specified bank account.

Analysis:

1. The Writ Petition concerns the freezing and attachment of bank accounts by the Department of Sales Tax to recover dues under the Maharashtra Value Added Tax Act, 2002 and the Central Sales Tax Act, 1956. The Petitioners claim they are not dealers under these Acts and seek the release of their accounts from attachment.

2. The Petitioners challenge the demand orders and express the need for details and documents to file appeals against them. They assert that without the necessary information relied upon by the Department, they are unable to challenge the orders effectively.

3. To address the issue of securing tax liability while releasing the bank accounts, the Court orders the maintenance of a specified balance in a designated bank account. This balance is intended to ensure that the tax liability is covered while allowing the Petitioners to continue their business operations.

4. A disputed amount of tax liability is highlighted, with the Petitioners claiming a different total than the Department. The Petitioners make a deposit, and after discussions, a specific sum is agreed upon to be maintained in the bank account pending further proceedings.

5. Conditions are set for releasing the bank accounts, including the maintenance of a specified balance and the filing of statutory appeals within a designated period. The Court emphasizes the importance of balancing the rights and equities of both parties.

6. The Petitioners commit to filing statutory appeals and seeking interim reliefs within a specified timeframe. Failure to meet these requirements may result in the Department being allowed to recover the outstanding sums through other means.

7. If the Petitioners fail to file appeals or obtain interim orders, the Department is permitted to recover the dues in accordance with the law. The Court emphasizes the need for timely compliance and the consequences of non-compliance.

8. The Petitioners are granted an opportunity to argue for interim reliefs based on their merits and in accordance with the law. The Court ensures that both sides have the chance to present their contentions at the appropriate stages of the proceedings.

9. An undertaking is made by the Petitioners to make up any deficit in the specified bank account, ensuring that the agreed-upon balance is maintained. This undertaking is a crucial aspect of the Court's decision to release the bank accounts and allow the Petitioners to operate them for necessary transfers.

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