Cash credit accounts are not attachable as the account-holder's property under VAT attachment powers.

A cash credit account maintained with a bank was treated as a borrowing facility, not a deposit belonging to the account-holder. On that basis, the Gujarat HC held that the relationship in respect of such an account is not one of debtor and creditor for attachment purposes, so the amount cannot be treated as the account-holder's property under section 45(7) of the Gujarat Value Added Tax Act, 2003. The account was therefore not liable to attachment, and release was directed.

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Issues: Whether a cash credit account maintained with a bank could be attached under section 45(7) of the Gujarat Value Added Tax Act, 2003.

Analysis: A cash credit account is in the nature of borrowing from the bank and not a deposit belonging to the account-holder. The relationship between the bank and the account-holder in respect of such an account is not that of debtor and creditor. On that basis, the amount in such account cannot be treated as the petitioner's money for the purpose of attachment.

Conclusion: The cash credit account was held not to be liable for attachment, and the respondents were directed to release it forthwith.

Ratio Decidendi: A cash credit account, being a borrowing facility and not a debtor-creditor deposit account, cannot ordinarily be attached as the account-holder's property under the attachment power in section 45(7) of the Gujarat Value Added Tax Act, 2003.

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