2024 (10) TMI 1033 - HC - GST

Auction of property for recovery of taxes due from their vendor - petitioners contends that the property in question had been purchased, by way of registered deeds of sale and that the said property cannot be auctioned for recovery of the dues of the vendor - Sham transactions - HELD THAT - Section 81 of the Act merely provides for declaration of certain transactions to be void transactions with certain safeguards embedded in the proviso. However, there is no machinery available for determination of the question as to whether the transactions in question are sham transactions falling within the ambit of Section 81 of the Act. Prima facie, this Court, subject to the contentions that may be raised by the learned counsel for the respondents, is of the opinion that the provisions of Section 81 of the Act cannot be pressed into service unless there is a finding as to the nature of the transactions in question by a competent authority, authorized under the Act or the Rules. There shall be stay of all further proceedings, in pursuance to the notice, dated 26.06.2024, attaching immovable properties belonging to the petitioners - Post on 23.10.2024.

Summary

The High Court of Andhra Pradesh stayed further proceedings on auctioning property for tax recovery due to disputed transactions under Section 81 of the CGST Act, pending a determination by a competent authority. The petitioners were allowed to serve notice on the respondents and were prohibited from alienating the properties during the case. Next hearing scheduled for 23.10.2024.