Bank account attachment cannot continue after tax dues are paid; revision against penalty may proceed on merits.

After full discharge of the tax dues for the relevant assessment years, continued attachment of the bank account was unjustified even though the penalty demand remained disputed. The Court therefore directed lifting of the attachment and permitted the petitioner to pursue the revisional remedy against the penalty on merits. Pending disposal of the revision, coercive recovery steps were required to remain in abeyance. The separate jurisdictional challenge to the attachment under the Tamil Nadu Value Added Tax Act, 2006 was not examined further in view of the completed tax payment.

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Issues: Whether the petitioner was entitled to lifting of the bank account attachment after payment of the entire tax dues and to be permitted to pursue the revisional remedy against the penalty demand.

Analysis: The tax component for the relevant assessment years had been fully paid, while the dispute persisted only in relation to the penalty demand. In these circumstances, the Court found it unnecessary to examine the separate jurisdictional challenge to the attachment based on the Tamil Nadu Value Added Tax Act, 2006. Once the tax liability stood discharged, continued attachment of the bank account was unjustified, and the petitioner was to be enabled to pursue the pending revision on merits. Pending disposal of the revision, coercive steps were also required to be kept in abeyance.

Conclusion: The petitioner was entitled to relief. The attachment of the bank account was directed to be lifted, the revisional petition was to be taken on file and decided on merits, and no coercive action was to be taken meanwhile.

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