2019 (10) TMI 100 - HC - Service Tax

Attachment of petitioner's bank account - dues payable under Finance Act - HELD THAT - The CBDT Circular Nos. 984 dated 16th September. 2014 and 1053 dated 10th March, 2017, clearly provide that where a penalty has been deposited 7.5% or 10% as required in terms of Section 35F of C. Ex. Act read with Section 83 of the Act, in respect of an Appeal before the Commissioner (Appeals) or the Tribunal, then the Revenue would not adopt any coercive proceedings - In the present case, it is undisputed that M/s. Sampark (by whom the dues are payable), have deposited 10% of the outstanding demanded under Section 35F of C. Ex. Act in respect of its pending appeal before the Tribunal from the order of Commissioner (Appeals). The above CBDT Circulars, which are binding upon the authorities, prohibit the authorities under the Act from adopting coercive proceedings where such deposits have been made and appeal is awaiting disposal - thus, the continuance of the attachment of the Petitioners Bank Accounts in Allahabad Bank, Kolhapur is in the face of the above binding CBDT Circulars. Therefore, is bad in law. It is thus declared that the attachment of the Petitioners bank account in M/s. Allahabad Bank, Kolhapur by Respondent No.2, as communicated to the Petitioner by letter dated 21st May, 2018 is bad in law - petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to recovery notice and bank account attachment under the Finance Act, 1944.

Analysis:
The petition challenged the recovery notice and subsequent attachment of the petitioners' bank accounts by the Assistant Commissioner of CGST. The attachment was related to dues payable by another entity, M/s. Sampark Marketing and Advertising Solutions Pvt. Ltd., under the Finance Act, 1944. The petitioners, who are directors of M/s. Sampark, contested only the attachment of their bank accounts as communicated by Allahabad Bank. The undisputed facts revealed that M/s. Sampark received an order confirming a specific amount, against which they filed an appeal and made a deposit as required by law to stay the recovery of the balance amount. Despite this, the petitioners' bank accounts were attached for recovery. Subsequently, the Commissioner (Appeals) dismissed M/s. Sampark's appeal, leading to a further appeal to the Tribunal, where a deposit was made. The petitioners sought the vacation of the bank account attachment, citing relevant CBDT Circulars that prohibit coercive actions when deposits are made for pending appeals. The court emphasized that the attachment was against the binding circulars and ordered the vacation of the attachment on the petitioners' bank accounts in Allahabad Bank.

The court declared the attachment of the petitioners' bank account as communicated in the letter by the Assistant Commissioner of Service Tax as illegal. The Assistant Commissioner was directed to vacate the attachment and inform the bank accordingly. The judgment highlighted the importance of adhering to CBDT Circulars that restrict coercive actions when required deposits are made for appeals. The court's decision was based on the legal provisions and circulars that prevent authorities from adopting coercive measures when due processes are followed, such as making necessary deposits for appeals. The petitioners' plea for lifting the attachment was upheld, emphasizing the need to comply with the law and relevant circulars in such matters.