Bank Attachment Lifted on Payment of Pre-deposit for Tribunal Appeal

Issue

Whether the Department can continue to attach an assessee’s bank account for recovery of dues after the first appeal is dismissed, if the assessee is willing to file a second appeal before the Appellate Tribunal and pay the requisite pre-deposit.

Facts

Background: The assessee filed an appeal against an adjudication order, which was dismissed by the Appellate Authority (First Appeal).
The Action: Following the dismissal, the Department initiated recovery proceedings and attached the assessee’s bank account.
Assessee’s Stand: The assessee intended to challenge the dismissal before the Appellate Tribunal (Second Appeal). They expressed readiness to deposit 10% of the balance tax in dispute as a pre-condition for filing the appeal.

Decision

Deemed Stay: The High Court held that under the GST Act (specifically Section 112 read with Section 112(9)), once the pre-deposit is made, the recovery proceedings for the balance amount are deemed to be stayed.
Attachment Lifted: Consequently, if the recovery is stayed by law, the attachment cannot continue. The Court ordered that upon the assessee depositing the 10% sum, the attachment of the bank account must be lifted forthwith.
Liberty to Appeal: The assessee was granted liberty to prefer the appeal before the Appellate Tribunal.

Key Takeaways

Automatic Stay: The filing of an appeal along with the payment of the statutory pre-deposit triggers an automatic stay on the recovery of the remaining balance. The Department cannot resort to coercive measures like bank attachment during this period.
Tribunal Vacuum: Since the GST Tribunals are not yet fully functional in many areas, High Courts often intervene to ensure that taxpayers are not harassed with recovery actions when they are legally willing but practically unable to file the Tribunal appeal.
Liquidity Protection: This ruling protects businesses from being paralyzed (via frozen bank accounts) while they exercise their statutory right to appeal.

HIGH COURT OF CALCUTTA

S. S. Civil Construction (P.) Ltd.

Assistant Commissioner of Revenue, State Tax, Ultadanga, Cossipore, Belgachia Charge ^*

Om Narayan Rai, J.

WPA No. 27535 of 2025

DECEMBER 24, 2025

Arya Das for the Petitioner. Tanoy Chakraborty, Ms. Sumits Shaw and Saptak Sanyal for the Respondent.

ORDER

1. The petitioner assails the appellate order dated March 11, 2025 passed by the appellate authority under Section 107 of the WBGST Act, 2017/CGST Act, 2017 (in short ‘said Act of 2017’), whereby the petitioner’s appeal against an order dated April 25, 2024 has been dismissed.

2. It is submitted by the learned Advocate appearing on behalf of the petitioner that after dismissal of the petitioner’s appeal, the petitioner’s bank account has been attached. He invites the attention of this Court to a letter dated November 19, 2025 issued by the Punjab National Bank to the petitioner whereby it has been stated that in terms of a letter dated November 19, 2025, the bank authorities have been directed to pay a sum of Rs. 2,76,82,660/- to the Government in pursuance of a notice issued by the GST Authorities.

3. Learned Advocate appearing on behalf of the petitioner submits that he is ready and willing to diposit a sum equivalent to ten percent of the balanced tax in dispute in terms of Section 112(8) of the said Act of 2017 and prefer an appeal before the Appellate Tribunal against the order impugned herein in accordance with law. It is submitted that the respondents-GST Authorities should be directed to lift the attachment upon deposit of a sum equivalent to ten percent of the balanced tax in dispute in terms of Section 122(8) of the said Act of 2017 being made.

4. The petitioner further submits that he is apprehensive that the other bank accounts of the petitioner may also be attached.

5. Mr. Sanyal, learned Advocate appearing on behalf of the respondents-GST Authorities, submits that in terms of the provisions of Section 122(9) of the said Act of 2017, if an amount, as indicated in Section 122(8) of the said Act of 2017, is deposited, recovery proceeding for the balanced amount shall be deemed to be stayed.

6. Heard the learned Advocates appearing on behalf of the respective parties and considered the material on record.

7. In view of the prayer made by the petitioner, there is no use of keeping the writ petition pending. If the petitioner deposits a sum equivalent to ten percent of the remaining amount of tax in dispute in terms of Section 112(8) of the said Act of 2017 within two weeks from date the attachment of the petitioner’s bank account in Punjab National Bank shall be lifted forthwith since the recovery proceedings shall be deemed to have been stayed in terms of the provisions of Section 112(9) of the said Act of 2017.

8. The petitioner shall be at liberty to prefer an appeal against the said order before the appellate Tribunal in accordance with law, as and when the Tribunal becomes functional and the filing of appeals before it begins.

9. It is needless to mention that upon such deposit being made in terms of Section 112(8) as aforesaid, the recovery proceedings for the balance amount shall be deemed to be stayed in terms of Section 112(9) of the said Act of 2017 and in such view of the matter the petitioner’s apprehension of its other Bank accounts being attached will no longer remain there.

10. WPA 27535 of 2025 stands disposed of without, however, any order as to costs.

11. Urgent Photostat certified copy of this order, if applied for, be given to the parties on priority basis.