Recovery notice under VAT law was treated as non-garnishee communication, with bank action on petitioners' accounts restrained.

A notice issued under Section 45 of the Karnataka Value Added Tax Act, 2003 was treated as a recovery notice for tax arrears against the defaulter concern, not as a garnishee notice against the petitioners. The Court noted the respondents' stand that no garnishee notice had been issued to the petitioners and indicated that any independent action by the bankers on a departmental communication would have to be clarified with the bank. It then directed the bankers not to proceed against the petitioners' accounts in terms of that notice, giving the petitioners limited protection from coercive account action.

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Issues: Whether the notice issued under Section 45 of the Karnataka Value Added Tax Act, 2003 warranted interference, and whether the petitioners' bank accounts could be restrained from being proceeded against on the basis of the departmental communication.

Analysis: The notice under Section 45 was issued in connection with recovery of tax arrears against the defaulter concern and not as a garnishee notice against the petitioners. The Court noted the respondents' stand that no garnishee notice had been issued to the petitioners and observed that, if the bankers had independently acted on any communication, the petitioners would have to clarify the matter with the bank. Considering the circumstances, the Court directed the bankers not to proceed with the petitioners' accounts in terms of the departmental notice.

Conclusion: The petitioners obtained limited protection against coercive action on their bank accounts, and the writ petitions were disposed of with that direction.

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