HC Permitted Department to Re-deposit Amount Unilaterally Recovered from Assessee’s Bank Account

Case Details: Pradeep Kumar Siddha v. Union of India - [2023] 151 taxmann.com 142 (Bombay)

Judiciary and Counsel Details

• • Nitin Jamdar & Abhay Ahuja, JJ.
  • Brijesh Pathak, Adv. for the Petitioner.
  • J.B. Mishra, Dhananjay B. Deshmukh, Varun Shinde, Vivek Sawant, Adv. Rahul Kumar & Sanjay P. Mathur for the Respondent.

Facts of the Case

The petitioner filed a writ petition challenging the unilateral deduction of funds from their bank account by the GST authorities without their permission and without informing the petitioner. The court expressed concern over the authorities’ actions and considered it a gross abuse of power and a violation of the taxpayer’s rights.

The court instructed the concerned officer responsible for instructing the bank to debit the petitioner’s account to file a personal affidavit explaining the legal basis for their actions and why they did not inform the petitioner. In the affidavit-in-reply, the officer relied on Section 79(1)(c)(i) of the CGST Act to justify their actions. However, the petitioner argued that this provision was not applicable in their case.

High Court Held

Section 79 of the CGST Act deals with the recovery of tax and outlines various modes for recovery. The court observed that in this case, the respondents unilaterally deducted the amount from the petitioner’s bank account without proper legal justification. The officer responsible for the deduction was directed to file an affidavit specifying the time frame for crediting the amount to the petitioner’s account. Once the affidavit was filed within two weeks, the court registrar would allow the respondents to withdraw the amount, and it would be credited back to the petitioner’s bank account within two weeks. Given the above, the writ petition was disposed of by the court.