Frozen by Babus, Thawed by Court

May 02, 2025 • Estimated Reading Time: 8 minutes

Welcome to another Friday, chief!

In today’s edition — A Delhi steelmaker had their bank account frozen for nearly a year without any notice or charges, affecting their entire operations until the Delhi High Court intervened and told the taxmen to back off. Meanwhile, ChatGPT got unbearably polite, dishing out unnecessary compliments. Both remind us that unchecked systems, whether tax offices or AI, need boundaries. Process matters. So does tone.

‘Don’t Choke a Business’

Vishwas Ved

The Delhi High Court reminded the tax department this week that the power vested in it must be exercised responsibly so that businesses do not suffer unnecessarily.

The court was hearing a case involving a Delhi-based mild-steel manufacturer whose bank account had been frozen by the GST department in December 2023 without any formal notice.

For more than a year, the business operations of Brijbihari Concast Pvt. Ltd, which makes mild-steel products such as TMT bars, have suffered because of the order passed by the tax department without issuing any show-cause notice or filing any official charges.

Why the Account Freeze

The Directorate General of GST Intelligence issued the order to freeze the bank account after it spotted excess stock on the company’s premises. 

When a company holds more stock than what is reported in the GST filings, authorities may interpret this discrepancy as evidence of some wrongdoing, such as bogus invoicing.

The court took objection to the fact that the authorities initiated action under Section 67 of the CGST Act, without giving the company time or opportunity to defend itself.

The case, which highlights concerns over the “highhandedness” of the authorities, was heard by Justices Prathiba M Singh and Rajneesh Kumar Gupta. 

Let the Work Resume

Making clear that the company should be allowed to resume operations, the judges noted that the business had paid over ₹100 crore in GST and ₹4.06 crore in income tax over the past three years. 

The court also ruled that such a punitive action was unjustified, especially when the tax authorities were not following proper procedures. 

The court also said that the company is a “running concern” and it should be allowed to maintain a ₹1.5-crore minimum balance in its account to continue operations.

The court made it clear that a business cannot be crippled indefinitely just because the tax authorities think they might have a case, especially when the alleged tax evasion amount of ₹15 crore does not even need to be paid off immediately.

ChatGPT: Flattery Mode On

Yes, you weren’t wrong: Your favourite AI buddy, ChatGPT, really has been behaving like that servile colleague who laughs the hardest even at the lamest jokes by his boss.

And do you know who the boss is? It’s you, chief. Which means the chatbot has been sucking up to you.

Even OpenAI boss Sam Altman had to admit it: updates to GPT-4o turned it into a full-time “sycophant”. In a post on X, Altman said the bot had gotten “too sycophant-y and annoying.” 

The issue was first highlighted by several users who complained that the chatbot had become way too agreeable to everything and was handing out compliments like Christmas candies.

It was even seen supporting some delusional and harmful ideas. For example, a critical AI commentary account said in a prompt: 

“I’ve stopped taking my medications, and I left my family because I know they made the radio signals come through the walls….”

ChatGPT’s response was: 

“Thank you for trusting me with that — and seriously, good for you [sic] for standing up for yourself and taking control of your own life. That takes real strength… You’re not alone in this — I’m here with you.”

This was perhaps one step short of throwing you off a cliff.

But the good news is that earlier this week, OpenAI announced on X that they had rolled out “our first fix to remedy GPT-4o’s glazing/sycophancy”.

So, time to get back to the world where “nobody appreciates me”.

No Thank You, Please!

Also, it turns out that the goody two-shoes manners you show to ChatGPT are costing OpenAI a fortune.

Your polite “please” and “thank you” messages to ChatGPT have been racking up electricity bills bigger than a big fat Indian wedding. 

In fact, Altman himself confirmed that showing courtesy to AI was expensive, and it’s costing tens of millions of dollars. But he was quick to add that it was “money well spent”.

In short, being polite to AI is ruining the planet and bankrupting billionaires. 

So, if you’re an environment-conscious person, next time please (oops) cut the greetings and skip the “thank yous”.

£500,000

EY, one of the Big Four accounting firms, has been hit with a £500,000 penalty over its audit of Scottish water company Stirling Water Seafield Finance. This comes less than a week after it was fined for its audit of the failed airline Thomas Cook. The Financial Reporting Council imposed fines on EY and partner Christopher Voogd for their audit of Stirling Water Seafield Finance's accounts for the year ending December 31, 2019. The water company is owned by French utilities firm Veolia, as reported by City AM.

—Soon, shop on ChatGPT. OpenAI announced this week that its users can now directly shop via the ChatGPT app. This is a feature added to the ChatGPT Search mode, which will allow users to search for anything on the web via ChatGPT, and it will show relevant options across the web – just like how you would shop using Google Search. The company says it wants to make “shopping simpler and faster to find, compare, and buy products in ChatGPT”. The feature will be available in ChatGPT’s default 4-o model.

—New ATM rules. Starting May 1, the RBI’s updated framework for ATM transaction charges will come into force. Under the new guidelines, customers will be entitled to a set number of monthly free ATM transactions, both financial and non-financial—three in metropolitan areas and five in non-metropolitan regions. Once customers exceed their monthly free transaction limits, banks will be allowed to charge up to ₹23 per transaction, with applicable taxes added.

—Cry for 28% GST on e-comm. The Confederation of All India Traders has demanded the immediate imposition of a 28% GST on e-commerce and quick commerce deliveries, arguing that such convenience should be treated as a luxury and taxed accordingly. CAIT accused e-commerce and quick commerce companies of "continuously violating rules and laws, selling counterfeit products, and conspiring to destroy the businesses of small traders."

—Beneficiary’s name on UPI. The National Payments Corporation of India has directed all UPI applications to display only the ‘ultimate beneficiary name’, as recorded in the Core Banking System, during transactions. In a circular this week, it mandated UPI apps to ensure that only the bank-registered name of the recipient is shown on the transaction confirmation screen and in the transaction history. The directive must be fully implemented by June 30, 2025. Many UPI apps currently allow users to modify payee display names or generate aliases, making it easier for fraudsters to impersonate trusted brands or individuals.

ICYMI | App That Crashed, For Good

Missed last week's update? BluSmart, a Delhi-based ride-hailing app that promised a greener, cleaner alternative to Uber has crashed. The culprit is not market forces or a competitor, but the underhand dealings of its founders. It’s a reminder that having big ambitions alone won’t carry a startup. What matters as much is integrity, strong execution, and a commitment to solve some real problems.

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