The Australian Taxation Office has dropped its case against a Russian oligarch it alleged owed $34 million in unpaid taxes after resolving the dispute.

The Federal Court on Monday set aside a freezing order over $116 million worth of Australian shares owned by Vladimir Iorich's Swiss-based Pala Investments that was originally issued on the request of the ATO's Project Wickenby team.

A Senate estimates hearing into the bungled tax office roll out in 2010 heard taxpayers were with issued tax debts when they were owed refunds because the supercomputer could not cope with negative figures. Credit:Louie Douvis

Outside of mining and taxation circles, Mr Iorich is best known for accusing former NSW premier Nick Greiner of bid-rigging while he was chairman of Bradken Resources.

Fairfax Media revealed earlier this year that the ATO had launched legal action against Mr Iorich's Pala Investments alleging it had accrued the massive tax liability between 2009 and 2011.