Bank account attachment for another firm's tax dues is illegal absent direct nexus or separate liability.

The Department could not attach and freeze a firm's current account to recover tax dues assessed against a different partnership firm merely because one partner was common to both entities. The liability arose from re-assessment against the other firm, and the petitioner had no direct nexus with that demand. Recovery had to be pursued against the defaulting firm or its partners, and any attempt to proceed against an individual partner's assets required separate factual inquiry. Coercive recovery against a stranger to the re-assessment proceedings was therefore unjustified, and the attachment of the petitioner's account was held illegal.

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Issues: Whether the Department could lawfully attach and freeze the petitioner's current account and withdraw funds from it for recovery of tax dues determined against another partnership firm merely because one partner was common to both firms.

Analysis: The re-assessment and demand were made against a different partnership firm. The petitioner firm had no direct nexus with that liability, and the mere fact that one partner was common to both firms did not authorise recovery from the petitioner's bank account. Recovery, if permissible, had to be pursued against the defaulting firm or its partners, and any action against the individual partner's assets required separate factual inquiry. A coercive recovery action against a stranger to the re-assessment proceedings was therefore not justified.

Conclusion: The attachment and freezing of the petitioner's current account was illegal, and the petitioner was entitled to relief against the recovery action.

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