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2017 (4) TMI 10 - HC - VAT and Sales TaxLien over Bank account - ex parte reassessment order - territorial jurisdiction - The petitioner maintains its account with Khairtabad (Hyderabad) branch of Bank of Baroda, which is beyond the territorial limits of State of Karnataka. Hence the first respondent could not have exercised his authority and issued any notice to its banker - reliance placed in the case of [1989 (4) TMI 300 - KARNATAKA HIGH COURT] where the recovery proceedings were stayed solely on the ground that the department has sought to recover the entire tax in dispute in the absence of any order being made by the appellate authority on the stay applications and coercive process is being taken to recover the disputed tax. Whether first respondent could issue recovery notices to the branch manager of the petitioner's bank situated beyond the State of Karnataka under the provisions of the KVAT Act and KTEG Act? - Held that: - Attachment of a "net enabled" bank account stands precisely on the same footing as that of attachment and sale of shares in a company - both KVAT and KTEG Acts authorize recovery officers to demand money from "any person" and authorize recovery by attachment and sale of share in Companies. Hence, by natural corollary a tax recovery authority can lay its hands on the money in deposit in a bank account situated beyond its territory if the same is accessible online. Therefore applying "effects doctrine", the recovery proceedings initiated by the first respondent under the provisions of the KVAT Act and KTEG Act are pre-eminently tenable. Whether first respondent could have issued notices whilst writ petitions filed by the petitioner and I. A.s for stay are pending consideration? - Held that: - A careful perusal of the authority relied upon by the petitioner in the case of M. L. Narasimha Gupta shows that there is a classic difference between the two cases. In the said case, this court was concerned with an I. A. for stay to be considered by an appellate authority in a statutory appeal. In contrast, the case on hand is a writ petition wherein, the petitioner has challenged the "vires" of the Act and incidentally challenged the tax liability. Therefore, the immunity from recovery argued by the learned counsel for the petitioner is misconceived. Petition dismissed - decided against petitioner.
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