GST bank attachment relief granted where disputed Input Tax Credit was reversed and collateral liability remained unresolved.

Recovery by bank-account attachment in GST proceedings was lifted where the assessee had already reversed the disputed Input Tax Credit and the underlying liability remained tied up in parallel collateral proceedings. The Court balanced the assessee's position against the supplier-related dispute and found immediate coercive recovery inappropriate at that stage. Relief was granted on protective terms, preserving the respondent's and supplier's rights and preventing any direct or indirect payment to the supplier until appropriate orders are obtained in the collateral proceedings.

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Issues: Whether the recovery notice attaching the petitioner's bank account in GST proceedings should be vacated, having regard to the supplier-related dispute and the petitioner's reversal of Input Tax Credit.

Analysis: The petitioner had received the supplies and had already reversed the Input Tax Credit availed on the invoices in question. The proceedings against the supplier and the possibility of collateral recovery action created uncertainty about the ultimate liability. Balancing the interests of the petitioner and the supplier, the Court found it appropriate to remove the immediate attachment, while safeguarding against any direct or indirect payment to the supplier pending resolution of the collateral dispute in appropriate proceedings.

Conclusion: The bank account attachment was ordered to be vacated, subject to protection against payment to the supplier until appropriate orders are obtained in collateral proceedings.

Final Conclusion: The writ petition was allowed only to the extent of relief against the bank account attachment, with protective conditions preserving the respondent's and supplier's rights in pending or future proceedings.

Ratio Decidendi: Where the assessee has reversed the disputed Input Tax Credit and the underlying liability is entangled in parallel collateral proceedings, immediate recovery by bank attachment may be lifted on equitable terms to protect all stakeholders.

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