Raja Abhishek For NIRC 2024
3 months ago
๐ฐ ๐๐ฎ๐น๐ฐ๐๐๐๐ฎ ๐๐ถ๐ด๐ต ๐๐ผ๐๐ฟ๐ ๐ฅ๐๐น๐ถ๐ป๐ด: ๐ฃ๐ฟ๐ผ๐๐ถ๐๐ถ๐ผ๐ป๐ฎ๐น ๐๐๐๐ฎ๐ฐ๐ต๐บ๐ฒ๐ป๐ ๐ผ๐ณ ๐๐ฎ๐๐ต ๐๐ฟ๐ฒ๐ฑ๐ถ๐ ๐๐ฐ๐ฐ๐ผ๐๐ป๐ ๐ฅ๐๐น๐ฒ๐ฑ ๐จ๐ป๐ท๐๐๐๐ถ๐ณ๐ถ๐ฒ๐ฑ
๐ข The court held, "A cash credit account is a borrowing facility from the bank, not an asset or deposit of the company, and thus cannot be attached by the GST Department for tax recovery."
๐ ๐๐ฎ๐ฐ๐๐: ๐๐ฎ๐๐ฒ ๐ง๐ถ๐๐น๐ฒ: J.L. Enterprises vs Assistant Commissioner, State Tax โข ๐๐ฎ๐๐ฒ ๐ก๐๐บ๐ฏ๐ฒ๐ฟ: MAT 1001 of 2023 with IA No. CAN 1 of 2023 โข ๐๐ผ๐๐ฟ๐: Calcutta High Court โข ๐๐ฎ๐๐ฒ: 16-Jun-2023
๐๐๐๐๐ฒ: J.L. Enterprises faced a provisional attachment order by the GST Department on its cash credit account, aimed at securing potential unpaid taxes. The company argued that a cash credit account represents a bank facility for accessing funds rather than the company's own assets, making it unsuitable for attachment as it belongs to the bank.
Courtโs Solution: Recognizing the nature of cash credit accounts, the court ruled that such accounts do not qualify for provisional attachment under tax laws. It ordered the GST Department to remove the freeze within 10 days, stressing that attachment powers should be used carefully and only when there is a genuine risk of non-payment.
โ ๐๐๐ฑ๐ด๐บ๐ฒ๐ป๐: The court emphasized that provisional attachment must be applied judiciously and only to a companyโs actual assets. While the GST Department retains other legal avenues for tax recovery, this ruling limits their power to attach cash credit accounts, as they are not directly owned by the business.
๐ This ruling reinforces the necessity for tax authorities to balance tax recovery with the fair use of legal provisions, ensuring businesses retain access to critical banking facilities. Team GSTpanacea 7503031378
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