Mayur Gopal Agarwal And Another vs. The Assistant Commissioner Of State Tax And 2 Others

Held

The Court noted the submission made by the learned counsel for the petitioners that the Garnishee Notice dated March 20, 2023, had since been revoked by the Department. Consequently, the Court found that there was nothing further to be adjudicated in the present writ petition. The Writ Petition was accordingly dismissed as having become infructuous. The right of the petitioners to avail other remedies in the event of future situations arising was expressly reserved. No order as to costs was made.

Facts

The petitioners, Mayur Gopal Agarwal and Pushpa Agarwal, challenged a Garnishee Notice dated March 20, 2023, issued by the Assistant Commissioner of State Tax (1st Respondent) to Karur Vysya Bank (2nd Respondent). The notice was issued to the personal bank account of the 1st Petitioner, which is a joint account with the 2nd Petitioner. The petitioners argued that the notice was issued under Section 79(1)(c) of the GST Act instead of Section 29 of the Telangana Value Added Tax Act, 2005. They contended that the arrears of tax were allegedly due from M/s.R.N.Metals Private Limited, a company in which the 2nd Petitioner is a Director, and that personal property of a Director cannot be attached for company tax arrears when the company is not wound up. The petitioners sought to declare the garnishee notice arbitrary, without jurisdiction, and in violation of natural justice, and to set it aside as null and void.

Key Issues

1. Whether the Garnishee Notice dated March 20, 2023, issued by the 1st Respondent under Section 79(1)(c) of the GST Act, is legally sustainable when the alleged tax arrears pertain to a company and are sought to be recovered from the personal account of a Director and her mother, who is a joint account holder, without the company being wound up? Petitioner's Contention: The petitioners argued that the garnishee notice was wrongly issued under Section 79(1)(c) of the GST Act instead of Section 29 of the Telangana Value Added Tax Act, 2005. They further contended that tax arrears of a private limited company cannot be recovered from the personal property of its director when the company is not wound up, and that the action violates principles of natural justice and rule of law. Revenue's Contention: The judgment does not record any specific contentions made by the revenue or state respondents.