2026 (2) TMI 383 - HC - GST

Tax appeal and bank attachment: conditional vacation allowed if 25% deposit and appeal filed, else recovery proceeds.

Rectification under tax law and an assessment notice led to an attachment of the taxpayer's bank account; the court permitted conditional vacation of the ... Rectification u/s 161 - assessment u/s 73 - notice u/s 50(1) - statutory appeal subject to deposit of disputed tax for interim relief - vacation of bank attachment conditional on deposit and absence of other arrears - appellate authority may decide on merits notwithstanding limitation - HELD THAT:- In case, the petitioner files a statutory appeal within such time, the appellate authority is at liberty to proceed to pass a final order on merits without further reference to limitation. Subject to the Petitioner complying with the above stipulations, the attachment of the bank account of the Petitioner shall also stand automatically vacated. It is made clear that bank attachment shall be lifted subject to the petitioner depositing 25% of the disputed tax as ordered above and the Petitioner not being in arrears of any other amount for any other tax period barring the amount demanded under the impugned Order. In case the Petitioner fails to comply with any of the stipulations, the Respondent is at liberty to proceed against the Petitioner to recover the tax in accordance with law as if this Writ Petition was dismissed in limine today. Writ Petition stands disposed of. Issues: (i) Whether liberty should be granted to file a statutory appeal against an assessment order and whether interim relief in the form of lifting bank attachment can be granted subject to conditions.Analysis: The petition challenges an assessment order passed under Section 73 and notices under Section 50(1) and seeks rectification under Section 161 which was rejected. The petition is disposed at the admission stage by consent. Following established practice in similar matters, relief pending appeal is conditioned on the petitioner depositing a portion of the disputed tax to balance the competing interests of revenue protection and the availability of appellate remedy. The appellate authority is permitted to decide the appeal on merits without reference to limitation if the appeal is filed within the stipulated time. Compliance with the deposit requirement is linked to automatic vacation of the bank attachment, and failure to comply permits recovery action as if the petition were dismissed.Conclusion: Liberty is granted to file a statutory appeal subject to depositing 25% of the disputed tax within thirty days; upon compliance the appellate authority may decide the appeal on merits without limitation reference and the bank attachment shall stand vacated; failure to comply permits the respondent to proceed with recovery as if the petition were dismissed.