Bank Attachment Cannot Continue Once Pre‑Deposit Is Made: Calcutta High Court

The Calcutta High Court has clarified an important point of tax procedure: once a taxpayer complies with the pre‑deposit requirement for filing an appeal, ongoing bank attachments by revenue authorities must cease. This ruling provides immediate relief to businesses whose bank accounts were seized in recovery proceedings even as they prepared to pursue statutory remedies. The decision aligns with earlier judgments under the GST regime that balance the State’s right to revenue with the legal protection offered to taxpayers who comply with appellate conditions.  

What the Case Was About?

In S. S. Civil Construction (P.) Ltd. v. Assistant Commissioner of Revenue, State Tax, the petitioner’s appeal against a tax demand was dismissed at the appellate level. Following that dismissal, GST authorities moved to recover the disputed amount and attached the petitioner’s bank account with Punjab National Bank.  

The petitioner stated it was ready and willing to deposit 10 % of the balance tax in dispute under Section 112(8) of the CGST Act — the statutory requirement to file an appeal before the GST Appellate Tribunal once it becomes functional. The appeal mechanism created under Section 112(8) and the automatic stay under Section 112(9) were central to the arguments.  

The revenue authorities did not contest that compliance with the pre‑deposit triggered a statutory stay of recovery proceedings.  

The Court’s Ruling

The High Court held that once a taxpayer deposits the statutory pre‑deposit, the legal consequence under Section 112(9) follows automatically: recovery proceedings for the balance amount in dispute are deemed stayed by law. 

The Court noted that there was no purpose in keeping the writ petition pending and directed that:

• If the petitioner makes the 10 % pre‑deposit within two weeks,
• The attachment of its bank account must be lifted immediately,
• As the recovery proceedings stand stayed by operation of law.  

The judgment also clarified that once the pre‑deposit is made, the petitioner’s concern about attachment of other accounts would no longer arise, and it retains the liberty to file an appeal before the Tribunal when it becomes functional.  

Why This Ruling Matters

Under the GST appellate framework, the pre‑deposit requirement is a gateway to an appeal. Until the pre‑deposit is made, the revenue can continue recovery actions, including bank attachments. But once compliance with the statutory condition occurs, the law treats recovery for the remaining amount as stayed.  

This case aligns with other high court decisions holding that recovery actions — including debit from electronic ledgers or bank accounts — cannot lawfully continue once the taxpayer has satisfied the pre‑deposit condition and indicated a clear intention to appeal.  

Such rulings reinforce that procedural safeguards built into the GST Act cannot be bypassed by coercive enforcement steps once the statutory pre‑condition for appeal is met. They also underscore the judiciary’s role in ensuring that taxpayers are not left without remedy while pursuing legitimate appeals.

Conclusion

The Calcutta High Court’s decision confirms that bank attachments must be lifted once the statutory pre‑deposit for GST appeal is made. The judgment emphasises the automatic stay under Section 112(9) of the CGST Act, which prevents further enforcement actions beyond what the law permits, provided taxpayers honour the appeal pre‑conditions. This interpretation gives businesses clarity and protection during the often lengthened process of appellate litigation under the GST regime.