Madras HC Lets GST Taxpayer Mortgage Attached Property To Raise ₹50 Lakh, Directs ₹34.67 Lakh To Court-Ordered Tax Deposits

The petitioner challenged attachments over his bank account and immovable property arising from tax demands.

He stated that he had not participated in the assessment proceedings because notices and orders were uploaded on the GST portal, and that he challenged the assessments in four separate writ petitions.

In three of those petitions, remand was conditional on deposits totalling Rs.34,67,295.25; the fourth assessment order was set aside without a deposit condition.

The petitioner submitted that the property attachment prevented him from mortgaging his only available asset to raise the required funds and offered company machinery, valued at Rs.1,01,67,675, as alternative security.

The State accepted conditional lifting of the property attachment, subject to direct payment of the required deposit from the loan proceeds.

The order cites no statute, precedent, or specific legal doctrine.

The Court applied a case-specific approach: where an attachment imposed at the tax authorities’ instance prevents a petitioner from raising funds to comply with court-ordered deposits, the attachment may be lifted to a limited extent, subject to safeguards securing direct payment to the authorities and alternative security for the tax dues.

The Court accepted that the property attachment prevented the petitioner from obtaining a loan and thereby complying with the deposit conditions imposed in the related proceedings.

It balanced that impediment against the respondents’ interest in securing the tax dues by permitting a mortgage only to raise up to Rs.50,00,000, directing that Rs.34,67,295.25 be remitted directly to the authorities, and treating the company machinery as alternative security.

The bank must remit Rs.34,67,295.25 directly to the respondent authorities, give credit for that amount against the respective tax demands, and release any balance to the petitioner; the company assets and machinery are to be treated as alternative security for the tax dues.

The matter was directed to be listed for reporting compliance on 2 December 2026.