Personal Account of Club’s President Cannot Be Frozen for Club’s Default in GST Dues: Madras HC Orders De-freezing [Read Order]

The Madras High Court has held that the personal bank account of an individual cannot be frozen for the Goods and Services Tax ( GST ) liabilities of a club, even if the individual happens to be the president of the said club.

The petitioner, M. Jaiganesh, serving as the president of Dayton Club, approached the High Court seeking the de-freezing of his personal account held in Indian Bank. The Dayton Club, a separate legal entity, holds its own Taxpayer Identification Number (TIN), PAN, and maintains a separate bank account with ICICI Bank.

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Authorities had rightfully started recovery proceedings and attached the club's bank account due to the tax failure. However, the tax authorities went ahead and frozen the petitioner's personal account as well, noting that the petitioner's name was listed alongside the club in the assessment order.

GST READY RECKONER: Complete Topic wise Circulars, Instructions & Guidelines Click here

The petitioner contended that his personal account had no nexus to the club's financial transactions or tax liability, and that such attachment was arbitrary and unlawful.

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Justice S. Srimathy concurred with the petitioner’s argument, stating that liability under GST must rest with the taxable entity in this case, the club and not with its office-bearers in their personal capacity, unless specific wrongdoing is established.

GST READY RECKONER: Complete Topic wise Circulars, Instructions & Guidelines Click here

Accordingly, the Court quashed the impugned order to the extent that it fixed personal liability on the petitioner and directed the respondent bank to immediately lift the freeze on the petitioner’s personal account.

With this direction, the writ petition was allowed, and all connected miscellaneous petitions were closed, with no order as to costs.

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To Read the full text of the Order CLICK HERE

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