Provisional attachment of property

[Kaustubh Karandikar]

XYZ had not filed till date the GSTR - 3B Return for September'19 but had filed GSTR - 1. Can GST authorities issue a notice for provisional attachment of property under this situation?

[Rajagopalan Ranganathan]

Sir,

According to Section 62 of CGST Act, 2017

"(1) Notwithstanding anything to the contrary contained in section 73 or section 74, where a registered person fails to furnish the return under section 39 or section 45, even after the service of a notice under section 46, the proper officer may proceed to assess the tax liability of the said person to the best of his judgment taking into account all the relevant material which is available or which he has gathered and issue an assessment order within a period of five years from the date specified under section 44 for furnishing of the annual return for the financial year to which the tax not paid relates.

(2) Where the registered person furnishes a valid return within thirty days of the service of the assessment order under sub-section (1), the said assessment order shall be deemed to have been withdrawn but the liability for payment of interest under sub-section (1) of section 50 or for payment of late fee under section 47 shall continue.

If the registered person fails to furnish return or to pay the tax with interest even after service of notice under Section 62 then under Section 83 (1) of CGST Act, 2017 if the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue he may by order in writing attach provisionally any property belonging to the taxable person.

Such provisional attachment shall cease to have effect after expiry of period of one year from the date of the order [Section 83 (2) of CGST Act, 2017].

[KASTURI SETHI]

Comprehensive reply by Sh.Ranganathan Sir. Legal position is very much clear.

AI Summary

Provisional attachment of property may be ordered to protect revenue when returns remain unfurnished, with limited withdrawal on later filing. Where a registered person fails to furnish returns, the proper officer may assess tax to the best of his judgment; if a valid return is furnished within the short statutory period the assessment is deemed withdrawn though interest and late fee liabilities remain. If non compliance with return filing and payment persists after notice, the Commissioner may order provisional attachment of the taxable person's property as a revenue protection measure, subject to time limits and procedural requirements.