Extract of Section 83 of the CGST Act, 2017
Section 83: Provisional Attachment to Protect Revenue in Certain Cases
(1) Where during the pendency of any proceedings under section 62, section 63 or section 64, section 67 or section 73 section 74, the Commissioner thinks that to protect the interest of the Government revenue, it is necessary to do, he may, by order in writing, attach provisionally any property, including bank account, belonging to the taxable person in such manner as may be prescribed.
(2) Every such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the order made under subsection (1).
DRC-13 Notice
The GST DRC-13 notice is a crucial document issued by the GST authorities. It informs a taxable person about the provisional attachment of their property, including bank accounts. This notice plays a significant role in safeguarding the government’s revenue interests during ongoing proceedings related to assessment, inspection, search, seizure, and determination of tax liability.
Example Scenario
Suppose a business, XYZ Pvt Ltd, is under investigation for significant discrepancies in its GST returns, leading to a suspected substantial tax liability. During the investigation, to prevent XYZ Pvt Ltd from disposing of its assets and to secure the government’s revenue interests, the Commissioner issues a DRC-13 notice for the provisional attachment of XYZ Pvt Ltd’s bank accounts and specific immovable properties.
Legal Recourse and Proceedings
Legal Recourse
When a taxpayer receives a GST DRC-13 notice, they should:
Legal Proceedings
If the taxpayer believes that the provisional attachment is unjustified, they can:
Penalties and Prosecution
While the provisional attachment itself is not a penalty, it can lead to significant operational challenges for the business:
Do’s and Don’ts on Receiving a GST DRC-13 Notice
Do’s
Don’ts
Legal Remedy
If a taxpayer believes that the provisional attachment is unjust or causes undue hardship, they have the following remedies:
Conclusion
Section 83 of the CGST Act 2017 provides the framework for provisional attachment to protect government revenue. The GST DRC-13 notice is critical for securing the government’s interests during ongoing proceedings. Understanding how to respond to such notices, the potential operational disruptions, and the available legal remedies can help businesses navigate the provisional attachment process smoothly and avoid possible legal issues. Proper preparation and professional guidance are essential to handling provisional attachments effectively and ensuring compliance with GST regulations.
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