Telugu superstar Mahesh Babu is in a mess thanks to his accounts being seized by the GST department over tax evasion issue.

Following the news that The Goods and Services Tax (GST) department attached the bank accounts of Mahesh Babu to recover service tax dues from him, his legal team has finally responded to the move, accusing the GST Commissionerate of lapses and claiming that the due amount of Rs. 18.50 lakh, for which they levied a penalty of Rs. 73.50 lakh, was non-taxable.

As per a report in a leading publication, the press statement by the legal team read, "The brand ambassador services were brought in the statute by insertion of section 65 (105) with effect from 1-7-2010. The GST Commissionerate Hyderabad has carried out the attachment without notice when several judicial pronouncements on this issue are in favour of the taxpayer and more so when the dispute is pending before the High Court Mahesh Babu is a law-abiding citizen complying with all fiscal legislation and has no undisputed tax payable."

On Thursday, Hyderabad GST Commissionarate issued a press release which claimed that Mahesh Babu had not paid the Service Tax during 2007-08 for the taxable services he rendered as a brand ambassador, appearance money and advertising for promotion of products among others.

"The total tax due from him was Rs 01.85 million. Today, the GST department has attached his bank accounts in Axis Bank and ICICI Bank for an amount of Rs 07.35 million, which includes tax, interest and penalty," it said.

A senior official at the GST department has stated that the 43-year-old superstar cannot operate the bank accounts until he settles the tax dues with the department.

Mahesh Babu approached the Central Excise and Service Tax Tribunal and the High Court later arguing that his services do not come under the Tax Ambit. But he did not get relief there. Finally, he decided to end the controversy amicably.

Currently, Mahesh Babu is holidaying in Dubai with his wife Namrata Shirodkar and their children.