GST Officer Prematurely Recovers Demand and Freezes Bank Account Despite Pending Appeal: Madras HC directs Refund

The Madras High Court has directed a GST officer to refund the amount recovered prematurely and lift the freeze on the bank account of a taxpayer, despite the pending appeal. The case arose when a GST officer recovered a demand from the taxpayer and froze their bank account before the appeal could be heard. The court ruled that the recovery action was premature and directed the officer to refund the amount. The ruling highlights the need for tax authorities to respect the appeals process and refrain from taking actions that could disrupt the financial stability of taxpayers before a decision has been made. It serves as a reminder for the GST department to follow due process and ensure that taxpayers’ rights are protected during the appeal stage.