What is Recovery by sale of movable or immovable property under GST

Recovery by sale of movable or immovable property under GST


The details about Recovery by sale of movable or immovable property under GST are explained here. 


Recovery by sale of movable or immovable property

  1. The proper officer shall prepare a list of movable and immovable property belonging to  the defaulter, estimate their value as per the prevalent market price  and  issue  an  order  of attachment or distraint and a notice for sale in FORM GST DRC- 16 prohibiting any transaction with regard to such movable and immovable property as may be required for the recovery of the amount due:

Provided that the attachment of any property in a debt not secured by a negotiable instrument, a share in a corporation, or  other movable property not in  the possession of  the defaulter except  for property deposited in, or in the custody of any Court, shall be  attached  in  the  manner  provided in rule 151.

  1. The proper officer shall send a copy of the order of attachment or distraint to the concerned Revenue Authority or Transport Authority or any such Authority to place encumbrance on  the  said movable or immovable property, which shall be removed only on the written instructions     from the proper officer to that  effect.
  2. Where the property subject to the attachment or distraint under sub-rule (1)   is-
    1. an immovable property, the order of attachment or distraint shall be affixed on the said property and shall remain affixed till the confirmation of   sale;
    2. a movable property, the proper officer shall seize the said property in accordance with    the provisions of chapter XIV of the Act and the custody of the said property shall either     be taken by the proper officer himself or an officer authorised by   him.
    3. The property attached or distrained shall be sold through auction, including e-auction, for which     a notice shall be issued in FORM GST DRC- 17 clearly indicating the property to be  sold and      the purpose of sale.
    4. Notwithstanding anything contained in the provision of  this Chapter, where  the property to  be  sold is a negotiable instrument or a share in a corporation, the proper officer may, instead of selling it by public auction, sell such instrument or a share through a broker and the said broker shall deposit to the Government so much of the proceeds of such sale, reduced by  his  commission, as may be required for the discharge of the amount under recovery and pay the  amount remaining, if any, to the owner of such instrument or a   share.
    5. The proper officer may specify the amount of pre-bid deposit to be furnished in the manner specified by such officer, to make the bidders eligible to participate in the auction, which may be returned to the unsuccessful bidders or, forfeited in case the successful bidder fails to make the payment of the full amount, as the case may be.
    6. The last day for the submission of the bid or the  date of  the auction shall not be  earlier than fifteen days from the date of issue of the notice referred to in sub-rule   (4):

Provided that where the goods are of perishable or hazardous nature or where the expenses of keeping them in custody are likely to exceed their value, the proper officer may sell them forthwith.

  1. Where any claim is preferred or any objection is raised with regard to the attachment or distraint of any property on the ground that such property is not liable to such attachment or distraint, the proper officer  shall investigate the  claim or  objection and  may postpone the sale for such time  as he may deem fit.
  2. The person making the claim or objection must adduce evidence to show that on the date of the order issued under sub-rule (1) he had some interest in, or was in possession of, the property in question under attachment or distraint.
  3. Where, upon investigation, the proper officer is satisfied that, for the reason stated in the claim      or objection, such property was not, on the said date, in  the  possession of  the  defaulter or  of  any other person on his behalf or that, being in the possession of the defaulter on the said date,     it was in his possession, not on his own account or as his own property, but on account of or in   trust for any other person, or partly on his own account and partly on account of some other  person, the proper officer shall make an order releasing the property, wholly or to such extent as he thinks fit, from attachment or  distraint.
  4. Where the proper officer is satisfied that the property was, on the said date, in the possession of the defaulter as his own property and not on account of any other person, or was  in  the possession of some other person in trust for him, or  in  the  occupancy  of  a  tenant  or  other person paying rent to him, the proper officer shall reject the claim and proceed with the process    of sale through auction.
  5. The proper officer shall issue a notice to the successful bidder in FORM GST DRC-11 requiring  him to make the payment within a period of  fifteen days from the  date of  such notice and  after  the said payment is made, he shall issue a certificate in  FORM GST  DRC-12 specifying the details of the property, date of transfer, the details of the bidder and the amount paid and upon issuance of such certificate, the rights, title and interest in the property shall be deemed to be transferred to such bidder:

Provided that where the highest bid is made by more than one person and one of them is a co- owner of the property, he shall be deemed to be the successful   bidder.

  1. Any amount, including stamp duty, tax or fee payable in respect of the transfer of the property specified in sub-rule (12), shall be paid to the Government by the person to whom the title in such property is transferred.
  2. Where the defaulter pays the amount under recovery, including any expenses incurred on the process of recovery, before the issue of the notice under sub-rule (4), the proper officer shall cancel the process of auction and release the goods.
  3. The proper officer shall cancel the process and proceed for re-auction where no bid is received    or the auction is considered to be non-competitive due to lack of adequate participation or due to low bids.

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