2020 (7) TMI 579 - HC - GST

Attachment of Bank Account of petitioner - realisation of tax dues - case of petitioner is that due to present COVID-19 lockdown situation they are not able to Seattle the dues - HELD THAT - It is stated that after making attachment, the first respondent has deducted a sum of ₹ 12,45,662/- from the bank account of the petitioner maintained in the second respondent Bank. Now, the petitioner wants to make the balance payment within 6 months. This Writ Petition is disposed of, with the following directions (a) The petitioner shall pay the balance due amount within 6 months from today to the first respondent. (b) If the petitioner fails to make full payment within the above stipulated period, it is open to the first respondent to resort to the remedy available under law to recover the said amount. (c) In view of the undertaking given by the petitioner as stated supra, the first respondent is directed to de-freeze the bank account maintained by the petitioner in the second respondent bank forthwith. ( d) Insofar as the interest claim if any, it is open to the first respondent to issue fresh proceedings to the petitioner and if any such proceedings is issued, it is open to the petitioner to agitate against the same in the manner known to law.

Summary

Issues involved:
Challenge to attachment of bank account for tax dues during COVID-19 lockdown, request for time to settle dues, consideration of petitioner's undertaking to pay within 6 months, balancing interests of both parties.

Analysis:

Issue 1: Challenge to attachment of bank account
The petitioner challenged the attachment of their bank account by the first respondent for tax dues amounting to ?83,58,962. The petitioner cited the COVID-19 lockdown situation as the reason for their inability to run the business and settle the dues immediately. The petitioner's counsel acknowledged the liability but sought time for payment, emphasizing the inability to manage day-to-day affairs due to the account freeze.

Issue 2: Request for time to settle dues
The petitioner requested a 6-month extension to settle the dues, with an affidavit affirming their commitment to clear the GST dues within the stipulated time. The petitioner's counsel assured that the entire amount would be paid if the requested time frame was granted, highlighting the financial constraints faced due to the attachment of the bank account.

Issue 3: Consideration of petitioner's undertaking
The Court considered the petitioner's undertaking to settle the dues within 6 months, taking into account the impact of the COVID-19 pandemic and the lockdown on businesses. The Court acknowledged the deduction of ?12,45,662 already made from the petitioner's bank account and decided to grant the requested time for payment to provide relief to the petitioner.

Issue 4: Balancing interests of both parties
In balancing the interests of both parties, the Court directed the petitioner to pay the balance due amount within 6 months to the first respondent. Failure to comply within the stipulated period would allow the first respondent to pursue legal remedies for recovery. The Court ordered the immediate release of the frozen bank account based on the petitioner's commitment and instructed that any future interest claims should be addressed through proper legal procedures.

Conclusion
The High Court disposed of the writ petition with directions for the petitioner to settle the balance dues within 6 months, allowing the first respondent to take legal action in case of default. The Court emphasized the importance of honoring commitments while considering the challenges faced by the petitioner during the pandemic, ensuring a fair balance between the parties' interests.