The Madras High Court has provided significant relief to an Erode-based businessman whose bank account had been frozen due to a disputed Goods and Services Tax (GST) order. Justice Krishnan Ramasamy, on 19 August 2025, quashed the impugned order of the Commercial Tax Department and directed that the bank account be de-frozen, subject to partial tax payment.
Background of the Case
The petitioner, Chandrasekaran, proprietor of Subha Earth Movers, had approached the court after his Axis Bank account was frozen following a GST demand for the financial year 2019-20. Notices were issued through the GST portal, but due to a consultant's mistake, an irrelevant reply was filed. Based on that response, the tax authorities passed an adverse order in August 2024, leading to the freezing of the petitioner’s bank account.
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The court observed that the petitioner had suffered due to "ill advice" from an unqualified consultant. Highlighting a broader concern, Justice Ramasamy noted,
"This Court comes across several cases where Assessees are misled by unqualified persons, leaving them without proper representation before the authorities."
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The judge further directed the department to issue a circular advising Assessees to engage only qualified consultants.
Conditional Relief Granted
Taking into account that the business had come to a standstill and several workers had lost employment, the court granted the petitioner another opportunity to contest the case. The order was set aside on the condition that the petitioner deposits 25% of the disputed tax within four weeks. The court clarified that only after such payment, the fresh proceedings would commence.
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Additionally, the court directed the Commercial Tax Department to issue a clear 14-day notice before the personal hearing and to decide the case on merits after considering the petitioner’s fresh objections. Importantly, the judge ordered the immediate release of the petitioner's frozen bank account, stating that once the impugned order was quashed,
"the attachment made on the bank account cannot survive any longer."
Case Title: Chandrasekaran vs. Assistant Commissioner (ST), Kodumudi Assessment Circle & Another
Case Number: W.P. No. 30638 of 2025
