In the UK, we have a 2 tier system (it's more complicated than that, but for the sake of the post, bear with me).
Government make the laws, have executive departments responsible for work, benefits, most of legislation, taxes etc.
Local Authorities are the councils looking after local schools, highways (to an extent), council taxes etc.
Now, I was renting out my flat. When there was a gap. I notified the Council when my tenant moved out and they said that they had been notified by the tenant already.
I get the letter and it says the name of my estate agent. There is a notification of when payment must be made for council tax (police, fire, emptying the bins etc).
I make the payment and the next month, I quote the number involved.
I sell the flat. Happy days.
Nearly a year later, I get a bill. They have calculated it wrongly. They are also demanding the 2 months I have already paid them.
Because it is in the name of the agent, they said that they need me to pay for it again. I explained that I made the payment, quote the reference numbers and my sort code and account number and the dates paid. They said that wasn't good enough, I explained that I wasn't going to pay them again.
They demanded my bank statement. I told them that wasn't going to happen. They said they would take me to court, I responded fine, as I could show the Judge my bank statements.
They then said, why couldn't I show them and I responded that I shouldn't need to. They have the money in thier bank, they have enough detail of me and the Local Authority don't have any need to see what else I spend my money on, or how much I have in my account (they wanted accounts with nothing crossed out etc).
I read up on the legislation and eventually told them to say I had exhausted thier internal efforts as I wanted to take them to the Ombudsman (which is a real ball ache for them and they get a financial penalty for each case).
They then said they spoke to the bank and confirmed I had paid them, albeit they moaned about doing it.
For me it's a control thing (not me controlling them, but them trying to control me into doing something I wasn't required to do). Not sure if I pushed it to far?
I think the only time they can legitimately demand copies of your bank statements is if you are applying for something like council tax benefit. In which case that is fair enough or else every tom dick and harry could do it.
Quite why they wanted you to pay them the same money again is rather baffling to me, perhaps its because most councils are so cash strapped that they pull shit like this in the hope that suckers will give them a few extra quid.
And you did right to withold the statements it is sod all to do with them. When my eldest was going to university she was "demanded" 2 or 3 times a year to submit proof she was a student in full time education. So I wrote to their council telling them, at length, to leave her the hell alone basically or I will involve her MP and explain that she is being unduly harassed. Many councils will back down reasonably quickly when the MP gets involved.
I got some bullshit reply essentially saying this is normal as many students leave full time education part way through the course and as such they expect their latest demand answered. So I told them it won't be answered until the next academic year and that if they take it further, I will gladly do that same. So far, touch wood, no trouble at the moment.