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Issues: Whether a cash credit account of an assessee can be attached for recovery under the special mode of recovery under Section 47 of the Bihar Value Added Tax Act, 2005.
Analysis: Section 39 of the Bihar Value Added Tax Act, 2005 provides the normal scheme for payment and recovery of tax, interest and penalty, while Section 47 creates an exception permitting a notice to any person or bank holding money for or on account of the dealer. The power under Section 47 is to be exercised only where there is money actually due to the dealer or held for the dealer, and not as a routine substitute for the ordinary recovery process. A cash credit account is a loan facility and not an containing money belonging to the dealer; there is no physical money in such an account and no debtor-creditor relationship in the relevant sense for attachment under the garnishee-like notice contemplated by Section 47. The statutory safeguard in Section 47(5) also makes it clear that where the bank proves that it does not hold money for or on account of the dealer, no remittance can be compelled.
Conclusion: A cash credit account could not be attached under Section 47 of the Bihar Value Added Tax Act, 2005, and the impugned recovery notices were liable to be quashed.
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