The Bombay High Court has allowed ByteDance to operate its bank accounts with HSBC and Citibank on securing tax authorities’ claims even as a probe into the financial dealings of the parent of social media app TikTok continues.
ByteDance, represented by senior advocates Rafiq Dada and Vikram Nankani, argued during a hearing on Tuesday that the attachment of its bank accounts by the Directorate General of Goods and Service Tax Intelligence, Mumbai had a direct impact on its staff, which had to be paid their salaries, and it should be allowed to operate its accounts for the same. The company said it has 800-1,000 employees on its rolls, according to the court order released on Wednesday.
Indian tax authorities in March had ordered HSBC and Citibank to freeze ByteDance’s accounts, claiming that the company received taxable services from a concern located outside India and was liable to pay goods and services tax on it worth Rs 78.91 crore. ByteDance had then challenged the move in the Bombay High Court.
Senior advocate Pradeep Jetly, lawyer for the tax department, on Tuesday told the court that looking at the current situation it would not be feasible to recover dues from ByteDance as they are in the process of closing the company.
While ByteDance said the tax authorities’ order was “drastic”, “passed without investigation” and that it doesn’t have to pay any tax, its lawyers Dada and Nankani assured the bench of Justice SP Deshmukh and Justice Abhay Ahuja that the company is willing to secure the Rs 78.91-crore claim. And after doing do, the company should be allowed to operate the accounts.
The tax department agreed to the proposal after which the high court bench disposed of the petition.
The ruling comes as a partial relief to ByteDance that is still facing a ban on TikTok, imposed in June last year along with 58 other apps.