LITIGATION MANAGEMENT IN GST REGIME (PART -9)

[Dr. Sanjiv Agarwal]

Section 78 of the CGST Act, 2017 provides that in case of failure of taxable person to deposit the amount within permitted time, the proper officer may initiate the recovery proceedings for recovery of such amount from taxable person.

If the payable amount is not paid within the specified time limit of 3 months then recovery proceedings shall be initiated and various actions may be taken by the recovery officer, for realization of Government dues. The options for recovery of Government dues include deduction of money from any amount payable to such tax payer, by detaining and selling any goods, by directing any other person from whom the money is due to such person, attaching any property belonging to the defaulter etc.

The proper officer may, in accordance with the rules to be made in this behalf, distrain any movable or immovable property belonging to or under the control of such person, and detain the same until the amount payable is paid; and in case, any part of the said amount payable or of the cost of the distress or keeping of the property, remains unpaid for a period of thirty days next after any such distress, may cause the said property to be sold and with the proceeds of such sale, may satisfy the amount payable and the costs including cost of sale remaining unpaid and shall render the surplus amount, if any, to such person

Recovery of tax by Execution of Decree

Rule 146 of CGST Rules, 2017 provides for recovery through execution of decree.

• Amount should be payable by the defaulter
• Execution of decree of civil court shall be for

• Payment of money,
• Sale in enforcement

• Proper officer to send request to court in writing
• Proper officer to send request to court for recovery through execution of decree in GST DRC-15
• Decree attached shall be executed through court
• Net proceeds for settlement of amount recoverable to be credited to Government account.

Recovery through Detention mode

Section 79 of CGST Act, 2017 read with Rule 147 of CGST Rules, 2017 provide for recovery of tax from detention of any movable or immovable property in following manner:

• Proper officer should be authorized by the competent authority to initiate such detention.
• What could be detained is any movable or immovable property belonging to the defaulter.
• Proper officer has to carry out the following activities:

• prepare a list of movable and immovable property belonging to the defaulter,
• estimate their value as per the prevalent market price,
• issue attachment order or distrain and a notice for sale in FORM GST DRC-16
• prohibit any transaction with regard to such movable and immovable property as may be required for the recovery of the amount due.

• Such detention of any movable or immovable property belonging to defaulter will be done till the amount payable is paid.
• Such property attached or distrained shall be sold through auction, including e-auction. A notice shall be issued in FORM GST DRC- 17 clearly indicating the property to be sold and the purpose of sale.
• No sale without notice.
• Notice to the issued by proper officer to successful bidder for making payment within 15 days from the date of auction in GST DRC-11
• Transfer letter for possession of goods issued by proper officer to successful bidders in GST DRC-12

• If any part of the amount payable or cost of distress or keeping the property is not paid within 30 days from such distress, the proper officer may sell the property and with the proceeds he may adjust towards:

• amount payable; or
• costs including the cost of sale remaining unpaid;

• After such adjustment, the remaining surplus, if any, shall be returned to the defaulter.