Gujarat HC Orders Bank Account Release of Director as No DRC-18 Finding Was Recorded

Pinank Rashehkumar VIN Vs Assistant Commissioner (Gujarat High Court)

The Gujarat High Court noted the State’s submission that the original directors had abandoned the company, ₹12 lakh had initially been recovered, and the petitioner’s bank account was attached after recovery efforts failed. The State also admitted that no findings were recorded in Form DRC-18 establishing that recovery from the company was not possible before proceeding against the petitioner.

In view of this admission, the Court directed the authorities to release the attachment on the petitioner’s Kotak Mahindra Bank accounts, fixed deposits, and Demat account within two days. The Court clarified that the authorities were at liberty to initiate appropriate recovery proceedings in accordance with law against the company or the responsible directors for the outstanding dues. Accordingly, the writ petition was allowed to that extent.

FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT

1. When the matter is taken up for hearing, learned AGP Mr. Raj Tanna, upon instructions of Ms. Namrata Ghataliya, State Tax Officer, Unit-50, Anand, has submitted that the original Directors of the company had abandoned the business and initially an amount of Rs.12 lakhs were recovered from the company. However, thereafter, despite efforts having been made, since no one appeared on behalf of the company, the respondents were constrained to attach the petitioner’s bank account. Upon instructions, learned AGP Mr. Tanna has candidly admitted that there are no findings recorded under Form DRC-18 categorically holding that it was not possible to recover the amount from the company hence, the department was constrained to recover the amount by attaching the bank account of the petitioner. He has further urged that an opportunity may be given to the respondent authorities to take appropriate recourse under the law, to recover the outstanding amount from the Directors and such action would be necessitated since the Directors were not responding to the communications issued by the respondent authority.

2. Under such circumstances and in light of the aforesaid facts, we direct the respondent authorities to release the attachment of bank accounts of the petitioner being maintained with Kotak Mahindra Bank, bearing Account Nos. 8120010007889, Fixed Deposit No.6449102503 and Fixed Deposit No. 6449102510 and Demat Account No.1201220000083189 forthwith, within a period of two days.

3. We further clarify that liberty is reserved in favour of the respondent authorities to take appropriate recourse in accordance with law, for recovery of the outstanding amount either from the company or from the responsible Directors.

4. With the aforesaid directions, the present writ petition is allowed to the aforesaid extent.