Madras HC axes Bank Account Attachment and Garnishee Proceedings for Tax Recovery on paying 25% of Disputed Taxes

The Madras High Court ruled that garnishee proceedings and bank account attachment for tax recovery cannot proceed unless 25% of the disputed tax amount is paid by the taxpayer. In this case, the taxpayer had contested the tax demand, and the court found that the tax authority’s actions to recover the full disputed amount through garnishee proceedings were premature. The court emphasized that the taxpayer must make a partial payment to demonstrate their willingness to settle the dispute. This decision seeks to balance the interests of the tax authorities and taxpayers, ensuring that taxpayers are not unduly harassed while the dispute is resolved.