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2015 (7) TMI 347 - HC - Service TaxRecovery of service tax - Freezing of bank accounts - Held that - there was no reason for the authority to hastily freeze and attach the bank account. If the Petitioner has a huge liability and which is towards taxes due to the Government, then, the least that was expected is that the competent authority decides the adjudication proceedings and by an appropriate order. It is only thereafter that the dues could be said to be crystallized and adjudicated. Presently, merely on issuance of show cause-cum-demand notice, copy of which is at Annexure B , the bank account could not have frozen and attached. More so, when the petitioner claims to have made some payments - Decided in favour of assessee.
Issues:
Challenge to communications regarding non-payment of Service Tax, freezing of bank account without adjudication order, legality of coercive measures, validity of show cause notice, release of bank account attachment, communications to debtors to pay directly to the Government. Analysis: The judgment of the High Court of Bombay pertains to a writ petition challenging communications related to non-payment of Service Tax and the freezing of a bank account without an adjudication order. The petitioner raised concerns about coercive measures taken by the revenue department before the completion of adjudication proceedings. The court noted that freezing the bank account solely based on a show cause notice was unwarranted. The court emphasized the necessity for the competent authority to decide on adjudication proceedings before crystallizing and adjudicating dues. As a result, the court quashed the communications at Annexures 'A1' and 'A2' and ordered the release of the petitioner's bank account from attachment. However, the court clarified that the revenue department could still initiate proceedings for recovery once the adjudication order is passed. Regarding communications to debtors instructing them to pay directly to the Government instead of the petitioner, the court found these actions equally unjustified. The court granted leave to amend the writ petition to challenge these communications as well. It directed the petitioner to make necessary amendments within a week and dispensed with the need for re-verification. The court also quashed and set aside the communications to debtors, emphasizing that they would not withstand legal scrutiny. In conclusion, the court ordered all concerned parties to act upon an authenticated copy of the judgment. The judgment highlights the importance of following due process in tax matters, ensuring that coercive measures are not taken prematurely, and upholding the rights of the parties involved in adjudication proceedings.
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