HC says tax dept can't attach cash credit account under Maharashtra GST Act
This story was originally published at 19:50 IST on 12 June 2025
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NEW DELHI – The Bombay High Court has ruled that the Maharashtra state tax department cannot provisionally attach cash credit accounts of taxable persons under the Maharashtra Goods and Service Tax Act, 2017. Stating this, the high court set aside the tax department's move to provisionally attach the cash credit account of Skytech Rolling Mill Pvt. Ltd. with ICICI Bank.
Under Section 83 of the Maharashtra Goods and Services Act, the state tax department is permitted to attach any property, including bank accounts that belong to taxable persons or entities for the purpose of protecting government revenue. A cash credit account is a short-term, revolving credit facility offered by banks to businesses for their working capital needs. This allows businesses to withdraw funds up to a pre-sanctioned limit, even if their account balance is low, and to repay and borrow again within that limit.
A bench of Justices Jitendra Jain and M.S. Sonak said that a cash credit account is a liability which an account holder owes to the bank for availing loan facilities and therefore by no stretch of imagination can be construed as a property belonging to the account holder. Under Section 83, the phrase "including bank account" following the phrase "any property", would mean a non-cash credit account, the court said. Therefore, in our view, a 'cash credit account' would not be governed by Section 83 of the Maharashtra Goods and Services Act, the bench of Justices Jain and Sonak said, observing that a cash credit account cannot be treated as "property" of the account holder that can be considered for attachment under Section 83 of the 2017 Act. End
Reported by Surya Tripathi
Edited by Nishant Maher
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