High Court Fines UP Commercial Tax Dept Of Rs 2 Lakh For Wrongly Attaching Flipkart’s Bank Account

Amidst ongoing squabble between private e-commerce companies and state tax departments, the Allahabad high court bench, comprising Justice Tarun Agarwal and Justice VK Mishra, has imposed a fine of Rs 2 lakh on the Uttar Pradesh commercial tax department for wrongly attaching a bank account of Flipkart in a purported attempt at tax recovery.

The department had allegedly also withdrawn Rs 49.8 crore from the company’s account “without any authority of law”.

“The court gets an uncanny feeling that a deliberate attempt was made by the respondents to withdraw money from the petitioner’s bank account through dubious means, by passing ex-parte assessment orders and not allowing it to be served validly on the petitioner,” the court said.

The court, in its order, has directed the tax department to refund the amount to Flipkart along with interest.

The court condemned the act and observed that if the department continued to function in such a manner,  companies would find it difficult to operate in the state.

According to the petition, the commercial tax department had not issued any summons to Flipkart with regard to non-payment of funds. Though the company had shifted its office from Noida to Ghaziabad in 2013, tax department officials kept affixing notices on its old office building despite knowing that the address had changed.

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