Blog No. 60: Default in payment of instalments – Attachment lifted subject to conditions

Remedy must not be worse than the evil that it seeks to protect from.

Considering the test of proportionality, despite the fact that petitioner failed to make payment of agreed instalments, the attachment of bank account was lifted. Hon’ble court held that it is in the best interest of both parties to permit the petitioner to continue in business operations subject to the caveats laid (a monthly statement of account is filed in hard copy, to ensure proper monitoring of the receipts and payments from that account) and any further that the revenue may choose to impose.

Read in detail about the case Forte Solutions Pvt Ltd Vs The Principal Addl Director General, DGGI reported as MANU/TN/5816/2021 below:

Facts of the Case

1. The petitioner did not, and this is admitted, remit the amounts of ST and GST collected by it from the service recipients.
2. As far as the service tax dues are concerned, the petitioner has approached the revenue by way of an application under the Sabka Viswas (Legacy Dispute Resolution) Scheme, 2019.
3. The total GST shortfall for the period 2017-18 to 2019-20 is ₹ 28,58,90,794/-. Post remittance of a sum of ₹ 9,38,52,849/-, the shortfall stood determined at an amount of ₹ 19,20,37,945/-. As against the admitted dues of GST, the petitioner has furnished a tabulation giving a scheme of instalment stretching up to December 2021.
4. Until May 2021, an amount in the region of around six (6) crores has been remitted.
5. The bank account of the petitioner was attached.

Submissions of the Assessee

6. The attachment only stands in the way of the petitioner carrying on business and making efforts to settle the arrears due.
7. The petitioner has been making and is continuing to make, an earnest attempt to repay the dues to the revenue.

Observations of the Court

8. Petitioner must be permitted to approach the revenue by way of a representation seeking lifting of the bank attachment, conditional upon her furnishing an undertaking therein to made earnest efforts to repay the admitted dues in line with a scheme of instalment to be arrived at.
9. The revenue will arrive at a new scheme of instalment and thereafter, consider lifting the bank attachment.
10. Since the bank is not arrayed before me, it is directed that bank to circulate a statement of inflow and outflow/debit and credit to the respondents on a monthly basis, should the revenue be inclined to lift the attachment.