Bombay HC tells China's ByteDance to deposit Rs 78.91 crore in tax evasion case

ByteDance has said in court it does not owe the tax government is demanding and does not agree with the tax authority's decision to freeze its accounts

The Bombay High Court on Tuesday permitted Chinese company ByteDance to operate its Indian bank accounts, that had been frozen by the Goods and Services Tax (GST) authorities over alleged tax evasion, after depositing a sum of Rs 78.91 crore in a state-run bank.

A bench of Justices SP Deshmukh and Abhay Ahuja directed ByteDance to deposit Rs 78.91 crore in any nationalised bank towards the demand raised by the GST authorities and said the company could operate its other Indian bank accounts and utilise the remaining funds.

The indirect taxes department has accused ByteDance of evading taxes and not paying its GST dues in full, a charge denied by the Chinese firm which owns the popular video app TikTok that was banned by the Indian government last year.

Read | ByteDance says India's freeze on bank accounts is harassment

ByteDance approached the HC last month denying all tax evasion allegations and seeking various reliefs, including challenging the provisional attachment order for freezing of its bank accounts in India.

On Tuesday, the HC directed the company to deposit Rs 78.91 crore, the amount it allegedly owes the tax authorities, to protect the latter's interest.

Senior advocates Rafiq Dada and Vikram Nankani, who appeared for ByteDance, argued that since all the money in its bank accounts had been frozen, the company had been unable to pay its Indian staff salaries.

The counsels said tax evasion proceedings against ByteDance had been going on for the last two years.

They said the company had provided the Indian authorities everything, including audited accounts, and yet, suddenly its accounts had been frozen.

In January this year, ByteDance had cut its workforce in India following the ban on its video app TikTok.

As per its plea in the HC, the company still has about 800 employees in India, most of whom service its overseas operations.

Advocates Pradeep Jaitely and Jitendra B Mishra, who appeared for the tax department, told the HC that the GST authorities had acted in accordance with law in attaching the company's properties and freezing its bank accounts.

The advocates said ByteDance had no chance of revival in India owing to the ban on TikTok.

Since there was a chance of the company exiting India completely, the attachment and freezing of accounts had been done to safeguard the interests of the tax authorities, Jaitely and Mishra said.