By TIOL News Service

CHENNAI, APR 04, 2016: THE petitioner, M/s Atchaya Engineering Pvt Ltd has filed a writ petition to issue a Writ of Mandamus to direct the respondent department to refrain from taking any coercive recovery proceedings against their company for recovery of the dues said to be payable by M/s. Atchaya Enterprises.

It is the case of the petitioner that the Director of the petitioner company was the proprietor of M/s.Atchaya Enterprises, which was engaged in the business of providing erection, commissioning and installations services and they are registered with the Service Tax Department. In proceedings initiated against the firm, department demanded a service tax amount of Rs.19,92,075/- along with interest and also imposed an equivalent penalty. M/s.Atchaya Enterprises has filed an appeal against the order. In the meanwhile, the respondent has issued a notice attaching the bank account of the petitioner company. The bank account of the petitioner company was attached on the ground that another entity has not paid the service tax as demanded in the order.

After hearing both sides, the High Court held:

++ Though the order dated 25.2.2014 was passed as against M/s.Atchaya Enterprises, the respondents 1 to 3 proceeded against the petitioner company, which is a Private Limited Company by attaching its bank account held with the 5th respondent.

++ The ratios laid down in the judgments relied upon by the petitioner squarely applies to the facts and circumstances of the present case.

++ When the petitioner company is a separate and independent entity, the bank account of the petitioner company cannot be attached for the dues of the proprietorship concern, viz., M/s.Atchaya Enterprises.

++ The bank account of the petitioner company, which was attached by the respondents 1 to 3, is liable to be raised. Accordingly, the attachment in respect of the petitioner company stands raised.

(See 2016-TIOL-662-HC-MAD-ST)