GST Authorities cannot Continue Bank Attachment after Statutory Pre-Deposit: Calcutta HC allows Appeal Before GSTAT once Functional [Read Order]

The Calcutta High Court has held that the gst ( Goods and Services Tax ) authorities cannot continue with the bank attachment when the statutory pre-deposit is paid. Also, it directed the petitioner to file an appeal before the GST Appellate Tribunal ( GSTAT ) once it is functional.

S. S. Civil Construction Private Limited, the petitioner challenged the continuation of recovery action, including attachment of its bank account, after dismissal of its first appeal under Section 107 of the GST Act, 2017.

The Petitioner filed its first appeal against the order of the department dated April 25, 2024 which was dismissed by the appellate authority on March 11, 2025.

After the rejection of the appeal, the department carried on with the recovery proceedings against the department. It issued directions to Punjab National Bank to debit an amount of ₹2.76 crore from the petitioner’s bank account.

The petitioner, aggrieved by this recovery, approached the High Court submitting that it is going to file a further appeal before the Appellate Tribunal and was ready and willing to deposit 10% of the disputed tax amount, as required under Section 112(8) of the GST Act.

Additionally, the petitioner sought lifting of the bank attachment upon such deposit and also said it is apprehended that its other bank accounts might be attached.

The petitioner’s counsel, Mr. Arya Das, Advocate argued that once the statutory pre-deposit is made, Section 112(9) of the GST Act clearly provides that recovery proceedings for the balance amount shall be deemed to be stayed, and therefore continuation of bank attachment would be illegal.

While opposing the writ, the State GST authorities' counsel, Mr. Tanoy Chakraborty, Advocate, along with Ms. Sumits Shaw and Mr. Saptak Sanyal, Advocates, acknowledged that under Section 112(9), the recovery proceedings automatically stopped after deposit of the amount specified under Section 112(8), and that recovery could not continue after that.

Justice Om Narayan Rai, accepting the statutory position, held that there was no justification for continuing the attachment of the petitioner’s bank account once the statutory pre-deposit is made.

The Court directed the department that if the petitioner deposits 10% of the remaining disputed tax within two weeks, the attachment of its bank account shall be lifted from then. Also, recovery proceedings would be deemed to be stayed by operation of law.

In addition, the bench clarified that the petitioner's fear about the attachment of other bank accounts would no longer remain after making such a deposit, and that the petitioner would be allowed to submit an appeal before the GST Appellate Tribunal as and when it becomes operational.

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