No Attachment of Director’s Demat Account if No Proceedings Have Been Initiated Against Him Under GST | HC
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- Last Updated on 20 February, 2025
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Case Details: Rajeev Jugalkishor Mundra vs. Commissioner of Goods and Services Tax Maharashtra -[2025] 171 taxmann.com 281 (Bombay)
Judiciary and Counsel Details
- M.S. Sonak & Jitendra Jain, JJ.
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Harsh Behany, Ms Maithili Iyer & Ms Atiksha Jain Advs. for the Petitioner.
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Ms Jyoti Chavan, Addl. GP, for the Respondent.
Facts of the Case
The assessee, a former director of a private company, filed a writ petition before the Bombay High Court challenging the provisional attachment of his Demat accounts by the GST authorities. The petitioner had resigned from the company due to personal reasons, and after his resignation, the company defaulted on its GST dues. The GST authorities initiated the attachment of the petitioner’s Demat accounts based on the company’s unpaid GST dues, despite the petitioner’s claim of having no connection with the company’s operations or liabilities post-resignation. The petitioner contended that the attachment lacked statutory backing, as no proceedings had been initiated against him under the relevant provisions and that the action violated principles of natural justice.
High Court Held
The Hon’ble Bombay High Court held that the provisional attachment of the petitioner’s Demat accounts was not justified, as it lacked statutory backing and failed to comply with the principles of natural justice. The Court further stated that the attachment could only be pursued if the petitioner were held liable after due proceedings under Section 89, ensuring procedural fairness. The Court quashed the attachment order, directing its withdrawal.
List of Cases Reviewed
- Prasanna Karunakar Shetty v. State of Maharashtra [2024] 161 taxmann.com 522 (Bombay) (para 11) followed.
List of Cases Referred to
- Prasanna Karunakar Shetty v. State of Maharashtra Writ Petition No. 3098 of 2024 (para 6).
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