Facts of the Case:

In this case, the petitioner challenged a recovery notice issued in Form GST DRC–13, by which his personal bank account was attached for recovery of tax dues of M/s. Trans Car India Private Limited. The petitioner was a Director of the said private company, which had suffered an adverse order. The company had initially challenged the Order-in-Original before the High Court.  Subsequently, the department proceeded to recover the outstanding tax dues by issuing the impugned DRC–13 notice and attaching the petitioner’s personal bank account, invoking Section 89 of the GST enactments. The petitioner contended that such action was contrary to Section 89 and that personal recovery from a Director was not automatic.

The respondents, on the other hand, argued that substantial tax dues remained unpaid by the company and that under Section 89, a Director of a private company is jointly and severally liable where dues cannot be recovered from the company.

Issue:

Whether the personal bank account of a Director of a private company can be attached for recovery of the company’s GST dues under Section 89 of the GST enactments, without affording the Director an opportunity to discharge the burden cast under the provision.

Held that:

The Court examined Section 89 of the GST enactments and observed that where tax, interest, or penalty due from a private company cannot be recovered, every person who was a Director during the relevant period shall be jointly and severally liable. However, such liability is not automatic or absolute. The provision expressly places the burden on the Director to prove that the non-recovery cannot be attributed to any gross neglect, misfeasance, or breach of duty on his part in relation to the affairs of the company. The Court held that the petitioner must be given an opportunity to discharge the statutory burden under Section 89(1). In the absence of such opportunity, direct recovery by attachment of the Director’s bank account could not be sustained.

Accordingly, the impugned recovery notice dated 25.11.2025 in Form GST DRC–13 was quashed. The matter was remitted back to the first respondent to pass a fresh order on merits within two weeks. The petitioner was directed to file a detailed reply explaining why recovery cannot be made against him for the company’s tax liability.

Case Name: Khalid Buhari, S/o. Abdul Kadar Versus Assistant Commissioner of CGST and C. Ex., Chennai, The Branch Manager, HDFC Bank, Chennai dated 13.02.2026