President not liable for clubs taxes: High Court Unfreezes Bank Account:

President not liable for clubs taxes: High Court Unfreezes Bank Account

In a recent judgement by the Madurai Bench of the Madras High Court, the Bench cited judgement in favour of the petitioner, who is president of Dayton Club, and his personal bank account was wrongly frozen due to the tax pendencies of the club.

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What Actually Happened?

Dayton Club is registered as a separate entity with its own PAN, TIN, and a bank account with ICICI Bank. The club had failed at paying certain taxes, and so the concerned authorities froze Dayton's bank account; this action can be accepted legally. However, the mess started to emerge when the personal bank account of the petitioner was frozen by the bank in relation to the club's tax dues. This impermissible act occurred only because his name was mentioned along with the club in the tax assessment order. The petitioner argued that the club, being a separate legal entity is solely accountable for all its tax liabilities, and his personal finances should not be involved.

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Writ Petition by the Applicant

The applicant on 28 April, 2025 submitted a formal representation, requesting authorities to defreeze his personal bank account but no action was initiated. Then he knocked on the doors of the High Court by filing a Writ Petition.

Court's Judgement

The court found validity in the petitioner's argument and ordered:

• The ICICI Bank to lift the freeze from the petitioner's personal bank account with immediate effect.
• The Writ Petition was accepted, imposing no cost.
• Other related petitions were also closed.