Overdraft account attachment in tax recovery is impermissible where the facility is not a debtor balance available for freezing.

An overdraft facility cannot be treated as money standing to the customer's credit for tax recovery attachment under section 39(1) of the Karnataka Value Added Tax Act, 2003, because it is not a debtor balance available for appropriation. On that footing, freezing the petitioner's overdraft account was impermissible, and the attachment was effective only to that extent. The authority remained free to proceed against any other account of the petitioner in accordance with law.

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Issues: Whether an overdraft account of the petitioner could be attached and frozen for recovery of tax dues under section 39(1) of the Karnataka Value Added Tax Act, 2003.

Analysis: An overdraft facility is not money standing to the credit of the customer as an amount due and payable to him. On that legal footing, attachment of such an account cannot operate to freeze the overdraft facility. At the same time, the authority was left free to proceed against any other account of the petitioner in accordance with law.

Conclusion: The attachment could not freeze the petitioner's overdraft account, and the challenge succeeded to that extent.

Ratio Decidendi: A bank account that represents an overdraft facility cannot be treated as a debtor balance available for attachment in tax recovery proceedings.

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