Voluntary GST Cancellation Not Grounds To Freeze Company's Bank Account: Rajasthan High Court

The Rajasthan High Court has directed the Bank of Baroda to de-freeze the account of the petitioner-company, allowing it to use it freely till finally deciding the company's representation, observing that the bank could not freeze the account merely because the company's GST registration was voluntarily cancelled.

The bench of Justice Nupur Bhati was hearing a petition filed by a company trading in goods which were exempted from the Goods and Services Tax, whose application for voluntary cancellation of GST registration was allowed by the concerned department.

However, post such cancellation, the petitioner was informed by the respondent bank that accounts with cancelled GST registrations were considered in the high-risk category, and hence, the petitioner's account was frozen by the bank. Against this, the present petition was filed.

The Court directed the petitioner to file a representation before the bank detailing its exemption from GST registration, and that in such circumstances, the account could not be frozen.

Accordingly, the respondent bank was directed to decide the said representation within 10 days, in accordance with law by way of a speaking order and allowed the petitioner to make transactions from the account, till the representation is decided.

Title: M/s Bhilwara Trading Company v Bank Of Baroda

Citation: 2025 LiveLaw (Raj) 363

Counsel for Petitioner(s): Naman Mohnot

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