The Bombay High Court has held that a cash credit account is not an account holder’s property and it is exempted from attachment under Goods and Service Tax (GST).
The bench of Justice M.S. Sonak and Justice Jitendra Jain has observed that “cash credit account” cannot be treated as “property” of the account holder which can be considered under Section 83 of the MGST Act. Therefore, a “cash credit account” would not be governed by Section 83 of the MGST Act.
Section 83 of the MGST Act provides for provisional attachment of ‘any property including bank account belonging to the taxable person’. The cash credit account is a liability which an account holder owes to the bank for availing the loan facility and therefore by no stretch of imagination a cash credit account can be construed as a property belonging to the account holder/Petitioner. The phrase ‘including bank account’ following the phrase, “any property” would mean a non cash-credit bank account.
The petitioner/assessee has challenged the action of Joint Commissioner of State Tax under Section 83 of the Maharashtra Goods and Service Tax (MGST Act) whereby the cash credit account of the Petitioner with ICICI Bank has been attached provisionally.
The account attached under Section 83 of the MGST Act is “cash credit account”. Therefore, the short issue raised was whether on a reading of Section 83 of the MGST Act, a “cash credit account” can be provisionally attached by exercising power under Section 83.
The court quashed the provisional attachment under Section 83 of cash credit account and directed the The department to immediately withdraw a letter addressed to the ICICI Bank and inform it to the bank immediately within next 24 hours.
The court clarified that the order would not preclude the Respondents from recovering by any other mode from the Petitioner, if any dues are pending, as per law.
Case Details
Case Title: Skytech Rolling Mill Pvt. Ltd. Versus Joint Commissioner of State Tax Nodal 1 Raigad Division
Case No.: WRIT PETITION NO.1928 OF 2025
Date: 10 June 2025
Counsel For Petitioner: Tanmay Phadke
Counsel For Respondent: Amar Mishra
