Bank Account Frozen Despite Amnesty Payment? High Court Orders Release in GST Recovery Dispute

The Madras High Court has recently directed the release of a bank account that had been attached by the GST department, as the petitioner had already paid the tax dues under the GST Amnesty Scheme.

The petitioner had challenged the Order-in-Original dated 14.12.2023. But this was dismissed, as the petitioner had opted for the Amnesty Scheme and settled the tax dispute. However, the GST department started recovery proceedings in the Order-in-Original dated 14.12.2023. The GST department also issued an intimation to Indian Bank directing it to put the petitioner’s bank account as ‘withhold’ for a sum of Rs 3,35,195. Therefore, the petitioner approached the High Court of Madras to request that it issue directions to the Bank to allow the petitioner to operate the Bank account.

As per the company, it had already paid all the tax amount on 15.03.2025, as it had opted for the Amnesty Scheme. The company claimed that the recovery proceedings should be paused, as the application filed under the Amnesty Scheme on 15.03.2025 is pending.

It was also submitted that Rs 1,43,192 was transferred through a Demand Draft to the GST department by the Branch Manager of the Indian Bank. The High Court directed the GST department to pay back this amount to the Bank, if the amount has not been encashed, within 10 days. The court also issued directions to release the petitioner’s bank attachment.