M.Jaiganesh Vs State Tax Officer
Date: May 21, 2025
Subject Matter
Personal bank account of a club's president cannot be frozen in relation to the tax liability of the club
Summary
The case involves a Writ Petition filed by the president of Dayton Club, requesting the court to quash an order dated March 17, 2025, which resulted in the freezing of both the club's and the petitioner's personal bank accounts due to the club's default in tax payment. The petitioner contended that their personal account should not have been frozen in relation to the tax liability of the club, which is its own legal entity. - The court found merit in the petitioner’s argument and decided in favor of allowing the Writ Petition. It quashed the order that fixed liability on the petitioner personally and directed the respondent bank to release the attachment on the petitioner’s personal bank account. Thus, the court protected the petitioner’s personal assets from being affected by the club's tax issues.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The present Writ Petition has been filed for the issuance of a Writ of Certiorarified Mandaumus, to quash the impugned order, dated 17-03-2025 and consequently, to direct the 1st respondent to release the bank account No. 612101502039 of the petitioner in 2nd respondent bank based on the representation of the petitioner, dated 28.04.2025.
2.The petitioner is the president of a club, namely Dayton Club, which is having a separate TIN number, PAN number and a separate bank account in ICICI Bank in Account No.61440107117. While the club has defaulted in paying the tax, the respondents have initiated proceedings and have attached the bank account belonging to the club. However, when the petitioner’s name was found in the assessment order along with the club name, the petitioner’s personal account was also frozen by the respondent bank. The contention of the petitioner is that the petitioner’s personal account cannot be frozen when the liability is fixed on the club.
3. Therefore, this Court is inclined to allow the writ petition. The impugned order is quashed to the extent the liability is fixed on the petitioner. Consequently, the 2nd respondent bank is directed to lift the attachment of petitioner’s personal account No. 612101502039.
4. With the above observations, this Writ Petition is allowed. No costs. Consequently, connected miscellaneous petitions are closed.