The Bombay High Court has held that bank accounts related to family members of GST assessee should not be attached.
This ruling has come after the Central Board of Indirect Taxes & Custom (CBIC) in a circular dated February 23 said that “remedy of attachment (of property including bank account) needs to be restored to with utmost circumspection and with maximum care and caution”. It normally should not be invoked in cases of technical nature and should be resorted to mainly in cases where there is an evasion of tax or where wrongfully passed on.
Dharmesh Gandhi had approached the High Court after nine bank accounts of his family members and his were provisionally attached by GST Department. The court noted that only three accounts belong to the Gandhi, while rest were of family members.
After going through arguments and counter arguments, the division bench quoted some portion of ruling in the similar matter of Siddhart Mandavia Vs. Union of India (November, 2020) by the same court. According to the ruling, “It goes without saying that pre-assessment attachment of property, including bank account, even if provisional, is a drastic measure. Its sole purpose is to protect the interest of government revenue. It cannot be used as a punitive measure. It is a serious invasion into the private domain of a tax payer.”
Further, the same order observed that family members are not the taxpayers concerned here. “To be more specific there is no allegation or any averment made by the respondents that any money belonging to the petitioner or to his firm have been credited into the joint accounts of the petitioner with his wife or with his minor son or into the account of his wife,” the order had said.
Based on this ruling, last week the division bench in the present matter ordered six bank accounts belonging to family members of the taxpayers to be released. Also, with regard to accounts belonging to the taxpayers, the bench permitted the petitioner to file an objection within seven days. Tax officials will have to dispose this application within three weeks from the date of filing of objections.
Source : thehindubusinessline.com
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