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of <h1>High Court orders release of attachment on petitioner's bank account, emphasizes immediate action, sets new deadline</h1> <h3>M/s H.M. Industrial Pvt. Ltd Versus The Commissioner, Cgst And Central Excise</h3> The High Court of Gujarat directed the respondent to release the attachment on the petitioner's cash credit account maintained with the Bank of Baroda. ... Attachment on the petitioner’s cash credit - existence of debtor-creditor relationship - recovery of dues - Held that:- This court in the case of Kaneria Granito Ltd. v. Assistant Commissioner of Income Tax, [2016 (7) TMI 65 - GUJARAT HIGH COURT], wherein it has been held that cash credit accounts were opened to enable the assessee to borrow the money from the bank for the purpose of its business. Any money, therefore, that the bank may make available to the assessee would necessarily be in the nature of a loan or a cash credit facility, in either case, would be in the nature of borrowing by the assessee from the bank. The bank and the assessee, therefore, do not have the debtor-creditor relationship. The respondent is directed to forthwith release the attachment on the petitioner’s cash credit account bearing No.02950500012441 maintained with the Bank of Baroda, Kapadvanj, Kaira - petition allowed. Issues: Release of attachment on cash credit accountAnalysis:The High Court of Gujarat, comprising Ms. Harsha Devani and Dr. A. P. Thaker, JJ., addressed the issue of attachment on a petitioner's cash credit account in a recent judgment. The respondent, represented by Mr. Nirzar S Desai, submitted an affidavit-in-reply. The court considered the decision in the case of Kaneria Granito Ltd. v. Assistant Commissioner of Income Tax, where it was held that cash credit accounts facilitated borrowing money from the bank for business purposes, establishing a debtor-creditor relationship between the bank and the assessee. Relying on Supreme Court precedents, the court set aside the notice of attachment.In light of the legal principles established, the court directed the respondent to release the attachment on the petitioner's cash credit account maintained with the Bank of Baroda. The specific account number was mentioned in the judgment, emphasizing the immediate release of the attachment. Additionally, the court granted a stand-over request to the respondent, extending the deadline to 7th February, 2019, with permission for direct service.The judgment underscores the importance of understanding the nature of cash credit accounts and the implications of borrowing from banks for business purposes. By setting aside the attachment and ordering its immediate release, the court upheld the legal rights of the petitioner in this case. The decision reflects a meticulous analysis of relevant legal precedents and serves as a significant legal precedent itself in matters concerning debtor-creditor relationships and financial transactions involving banks.
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