2019 (3) TMI 659 - HC - VAT and Sales Tax

Attachment of Bank Accounts - defaulters as named in the notice issued under Section 45 of the Karnataka Value Added Tax Act, 2003 - Held that - It is not in dispute that the garnishee notice under Section 45 of the Act has been issued to the Directors and Partners of M/s Vishal Concrete Works. If the bankers of these petitioners have issued any communication to freeze the accounts of the petitioners herein, the petitioners are required to clarify the same with the bankers. This Court directs the bankers not to proceed with the petitioners accounts in terms of Annexure-A issued by the Department - petition disposed off.

Summary

Issues:
Challenge to notice attaching bank accounts under Karnataka Value Added Tax Act, 2003.

Analysis:
The petitioners challenged a notice issued by respondent No.1 attaching their bank accounts with the 2nd respondent under the Karnataka Value Added Tax Act, 2003. The petition sought a direction to the bank not to freeze their accounts, claiming they were not defaulters as named in the notice. The petitioners argued that the defaulter company mentioned in the notice was not related to them. The court noted that no garnishee notice was issued to the petitioners, and any communication from the bankers needed clarification from the petitioners.

The court found that a garnishee notice had been issued to the Directors and Partners of the defaulter company, not to the petitioners. The court directed the bankers not to proceed with freezing the petitioners' accounts based on the notice issued by the Department. The petitioners were instructed to clarify any communication with their bankers. The judgment emphasized that the petitioners needed to address the communication with their bankers, and in the circumstances of the case, the court intervened to prevent the freezing of the petitioners' accounts.

In conclusion, the writ petitions challenging the notice attaching the petitioners' bank accounts under the Karnataka Value Added Tax Act, 2003, were disposed of. The court's decision was based on the lack of a garnishee notice to the petitioners and the need for clarification regarding any communication from the bankers. The judgment highlighted the importance of addressing the specific circumstances of the case and directed the bankers not to freeze the petitioners' accounts as per the notice issued by the Department.