Interim relief of de-freezing the bank account after depositing the first installment of disputed tax

The Madras High Court has granted interim relief to a petitioner by ordering the de-freezing of their bank account. This decision was made after the petitioner agreed to deposit the first instalment of their disputed GST liability. The court directed the petitioner to pay the tax portion in four equal instalments and the interest would be considered later. The bank account is to be unfrozen once the first instalment is paid.

The Hon'ble Madras High Court in M/s. N.S. Rathinam and Sons Pvt. Ltd. v. the Commissioner of CGST & CE [WP(MD) No.18576 of 2023 dated August 01, 2023] granted interim relief of de-freezing the assessee's bank account on the payment of the first installment of the total tax liability.

Facts

M/s. N.S. Rathinam and Sons Pvt. Ltd.("the Petitioner") had pending GST liability.

The Revenue Department ("the Respondent") passed an order ("the Original Order") demanding the GST along with interest and penalty. 

The Petitioner contended that he is liable to pay the tax and the interest portion quantified by the Respondent. However, the Respondent has issued orders to freeze the Petitioner's bank account and cancelled the GST registration.

Further, the Respondent passed another order ("the Impugned Order") for freezing the bank account of the Petitioner and further ordered the cancellation of the Petitioner's GST registration.  

Aggrieved by the Impugned Order, the Appellant filed a writ before the Hon'ble Madras High Court.

Issue

Whether an interim relief of de-freezing the bank account be granted when Petitioner contends his tax liability?  

Held

The Hon'ble Madras High Court in WP(MD) No. 18576 of 2023held as under: -

• Held that, pending final disposal of the case, the Petitioner must deposit the first installment of the GST as divided into four equal installments within one week of receipt of the order. 
• Directed, the Petitioner to pay the entire tax portion in four equal installments and the interest that will be considered after the payment of the tax liability.
• Further directed, the Petitioner to pay the first installment within one week from the date of receipt of a copy of the Court's Order.  
• Further held that, the Respondent must de-freeze the bank account of the Petitioner after payment of the first installment of the GST.