Court requires 15% predeposit to challenge tax demand, grants appeal stay with bank account attachment lifted.

The court imposed a predeposit condition of 15% of the principal tax demand of CST and State VAT for the petitioner to challenge the attachment of their bank accounts before the statutory period for filing an appeal had expired. Upon compliance with this condition, the court directed that the appeal would be entertained on merits with a stay against further recovery pending the appeal, and the attachment of the bank account would be lifted. The petitioner was also required to submit an undertaking confirming compliance with the predeposit requirement.

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Issues:
Challenge to attachment of bank accounts by respondents before the statutory period of limitation for filing appeal against assessment order was over.

Analysis:
The petitioners, registered dealers providing construction and engineering services, challenged the action of the respondents in attaching their bank accounts based on an order of assessment for the financial year 2013-14, which raised CST and State VAT demands. The Assessing Authority passed the order on 30.03.2018, and the petitioners had 60 days from the date of receipt to challenge it. However, before this period elapsed, the respondents initiated coercive recovery, leading to the attachment of the petitioners' bank accounts.

In response to the strong measures taken by the respondents, the court issued a short notice for hearing. The respondents argued through the learned AGP that it is not mandatory for authorities to wait for the full period of limitation before initiating recoveries arising from assessments. The court acknowledged this argument but noted that there were no extraordinary reasons for the drastic measure of attaching the bank accounts before the statutory period for filing an appeal had expired. The court observed that the issue in the assessment was repetitive, with similar questions having been decided against the assessee in earlier years, leading to appeals and stay orders with predeposit conditions.

The petitioner's counsel informed the court that an appeal had been filed along with an application for stay and waiver of predeposit. Considering the facts of the case, the court imposed a similar condition of predeposit in the present petition, stipulating that the attachment of the bank account would be lifted upon fulfillment of this condition. The court directed the petitioner to deposit 15% of the principal tax demand of CST and State VAT by a specified date. Upon such deposit, the appeal would be entertained on merits, with a stay against further recovery pending the appeal. The petitioner was also required to submit an undertaking from the responsible officer of the company confirming compliance with the predeposit requirement.

Consequently, the court disposed of the petition, providing specific directions for compliance, including the lifting of the attachment of the petitioner's bank account.

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