Bombay High Court grants relief to ByteDance by allowing de-freezing Its Bank Accounts in Tax-Liability Case

Bombay High Court grants relief to ByteDance by allowing de-freezing Its Bank Accounts in Tax-Liability Case

The Bombay High Court (HC) on 6 April 2021, in the case titled Bytedance (India) Technology Pvt. Ltd. (Petitioner) v. The Union of India & Ors. (Respondents) allowed the plea filed by ByteDance's for seeking de-freezing its' accounts based on the condition that it deposits the amount demanded by the tax authorities in a fixed deposit account in any nationalized bank.

The HC bench comprising of Justices SP Deshmukh and Abhay Ahuja granted relief to the petitioner who sought a direction to de-freeze its bank accounts. The Court accepts the plea of ByteDance (India) that is a subsidiary of TikTok. The company sought to operate its bank accounts in HSBC and Citibank after depositing the dues allegedly owed by the company to the Goods and Services Tax (GST) authorities.

The petitioner approached the HC being aggrieved by communications issued by the Principal Director General of Goods and Service Tax Intelligence, Mumbai (DGGI) provisionally attaching the petitioner's bank accounts. The authorities had passed a provisional attachment order freezing the petitioner's bank accounts as it failed to clear the outstanding dues of Rs. 78.91 crore.After India banned the popular video app TikTok, Bytedance cut its workforce in India.

The petitioner contended that the company had over 800 employees who have been working in India and overseas. The company claimed that the provisional order and illegal freezing of its' bank accounts amounted to harassment. It added that the company is facing a distressing situation as it had to disburse salaries and medical and general insurance of over 800 employees.

It was stated that the proceedings before the tax authorities have been going for two years, and the company has been fully co-operating by handing over everything including their account statements, although its' accounts have been freeze since then.

On behalf of the petitioner, it was contended that the amount seized by the Goods & Services Tax (GST) department is beyond the statutory requirement. It added that the company had previously paid taxes of huge amount.

The said contentions of the petitioners were strongly objected by the respondent authority and it was mentioned that after a ban on TikTok in India there is no scope of revival of the company. Hence, the company's accounts should not be de-freezed.

The HC after hearing both the parties at length and while disposing of the petition directed the petitioner to deposit the outstanding dues of Rs. 78.91 crore in a fixed deposit account of a nationalized bank, after which the frozen accounts could be operated.