VAT recovery from a third party's bank account fails without proved nexus; arbitrary attachment violates property rights.

Bank account attachment to recover VAT arrears of another entity was held unjustified where the petitioner's proprietor had only a past association with the defaulting company and no proved continuing nexus, representation, or control. Liability could not be fastened on the petitioner absent evidence to justify lifting the corporate veil or treating the two concerns as one. Recovery from the petitioner's account without notice and without legal basis was arbitrary interference with property and violated Article 300-A of the Constitution. The petitioner was entitled to refund with interest.

---

---

Issues: Whether the respondents could attach and appropriate the petitioner's bank account to recover VAT arrears of another entity on the basis that the petitioner's proprietor had earlier been associated with that entity and had signed its registration form.

Analysis: The recovery was made under Section 29 of the Andhra Pradesh Value Added Tax Act, 2005, but the admitted dues were not of the petitioner. The only basis relied on for fastening liability was the proprietor's past association with the defaulting company. The material showed that he had been released from that company years earlier and there was no evidence of any continuing connection, representation, or control after that date. In the absence of any proved nexus between the petitioner and the defaulting entity, there was no justification to lift the corporate veil or to treat both concerns as one. Recovery from the petitioner's account, without notice to it and without legal basis, amounted to an arbitrary interference with property.

Conclusion: The attachment and recovery from the petitioner's bank account were illegal and violative of Article 300-A of the Constitution of India, and the petitioner was entitled to refund with interest.

---