Separate legal personality bars attachment of a company's bank account for another concern's service tax dues.

A private limited company could not be made liable through attachment of its bank account for service tax dues assessed against a different proprietorship concern. The company was treated as a separate legal entity, and the fact that its director had earlier been the proprietor of the defaulting concern did not justify lifting the corporate veil or treating both entities as one without a legal basis. Recovery proceedings had been initiated against the proprietorship, not the company, so attachment against the company was not sustainable and had to be raised.

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Issues: Whether the bank account of a private limited company could be attached for recovery of service tax dues payable by a different proprietorship concern with which its director was earlier associated.

Analysis: The company was incorporated as a separate legal entity, while the tax demand and recovery proceedings were directed against the proprietorship concern. The mere fact that the company's director had earlier been the proprietor of the defaulter concern did not justify treating both entities as one and the same. In the absence of a legal basis to disregard the separate corporate personality, recovery could not be effected from the company for another entity's dues.

Conclusion: The attachment of the company's bank account was not sustainable and was directed to be raised.

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