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.