GST Jamku AIRecovery of tax.
Section 79(1)
Where any amount payable by a person to the Government under any of the provisions of this Act or the rules made thereunder is not paid, the proper officer shall proceed to recover the amount by one or more of the following modes, namely:—
(a) the proper officer may deduct or may require any other specified officer to deduct the amount so payable from any money owing to such person which may be under the control of the proper officer or such other specified officer;
(b) the proper officer may recover or may require any other specified officer to recover the amount so payable by detaining and selling any goods belonging to such person which are under the control of the proper officer or such other specified officer;
When someone owes money to the government according to the rules of this Act, and they haven't paid, the government can take steps to get that money. Here are the ways they can do it:
(a) Deducting from Owed Money: If someone owes money to the government, the proper officer (the person in charge of this process) can take the owed amount from any money that is supposed to be given to that person. Another specified officer can also be told to do this.
(b) Detaining and Selling Goods: If the owed money is not paid, the proper officer can take and sell any goods that belong to the person who owes money. This can be done by the proper officer or another specified officer. This is a way for the government to recover the unpaid amount.
- (c)
(i) the proper officer may, by a notice in writing, require any other person from whom money is due or may become due to such person or who holds or may subsequently hold money for or on account of such person, to pay to the Government either forthwith upon the money becoming due or being held, or within the time specified in the notice not being before the money becomes due or is held, so much of the money as is sufficient to pay the amount due from such person or the whole of the money when it is equal to or less than that amount;
(ii) every person to whom the notice is issued under sub-clause (i) shall be bound to comply with such notice, and in particular, where any such notice is issued to a post office, banking company or an insurer, it shall not be necessary to produce any pass book, deposit receipt, policy or any other document for the purpose of any entry, endorsement or the like being made before payment is made, notwithstanding any rule, practice or requirement to the contrary;
(iii) in case the person to whom a notice under sub-clause (i) has been issued, fails to make the payment in pursuance thereof to the Government, he shall be deemed to be a defaulter in respect of the amount specified in the notice and all the consequences of this Act or the rules made thereunder shall follow;
(iv) the officer issuing a notice under sub-clause (i) may, at any time, amend or revoke such notice or extend the time for making any payment in pursuance of the notice;
(v) any person making any payment in compliance with a notice issued under sub-clause (i) shall be deemed to have made the payment under the authority of the person in default and such payment being credited to the Government shall be deemed to constitute a good and sufficient discharge of the liability of such person to the person in default to the extent of the amount specified in the receipt;
(vi) any person discharging any liability to the person in default after service on him of the notice issued under sub-clause (i) shall be personally liable to the Government to the extent of the liability discharged or to the extent of the liability of the person in default for tax, interest and penalty, whichever is less;
(vii) where a person on whom a notice is served under sub-clause (i) proves to the satisfaction of the officer issuing the notice that the money demanded or any part thereof was not due to the person in default or that he did not hold any money for or on account of the person in default, at the time the notice was served on him, nor is the money demanded or any part thereof, likely to become due to the said person or be held for or on account of such person, nothing contained in this section shall be deemed to require the person on whom the notice has been served to pay to the Government any such money or part thereof;
The government has the power to collect money owed by individuals or entities. This process involves issuing a written notice to the debtor or any party holding money for the debtor. Let's break down the key points in simpler terms.
Notice and Payment Requirement:
- The government official can ask anyone who owes money or might owe money in the future to pay the government. This applies to individuals or entities that hold money on behalf of the debtor.
- The debtor or the holder of the money must comply with the notice. For certain entities like post offices, banks, or insurers, they don't need to show any specific documents before making the payment.
Consequences of Non-Payment: 3. If the debtor or money holder doesn't pay the government as instructed, they are considered a defaulter. This means they face consequences under the law.
Flexibility in Notices: 4. The official issuing the notice can change, cancel, or extend the time for payment if necessary.
Payment Authority and Liability: 5. If someone pays in response to the notice, it's considered as if the debtor authorized the payment. This payment clears the debtor's liability up to the specified amount in the receipt.
Personal Liability for Payments: 6. If a third party pays the debtor's liability after receiving the notice, that person becomes personally responsible to the government, but only up to the amount they paid or the debtor's liability, whichever is less.
Exemption for Innocent Parties: 7. If the party receiving the notice can prove they didn't owe money to the debtor or weren't holding any money for them at the time of the notice, they are not required to pay the government.
Conclusion: In summary, the government has the authority to collect outstanding dues through written notices, and non-compliance can lead to legal consequences. However, the process allows for flexibility and considers the circumstances of those involved.
(d) 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;
(e) the proper officer may prepare a certificate signed by him specifying the amount due from such person and send it to the Collector of the district in which such person owns any property or resides or carries on his business or to any officer authorised by the Government and the said Collector or the said officer, on receipt of such certificate, shall proceed to recover from such person the amount specified thereunder as if it were an arrear of land revenue;
(f) notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), the proper officer may file an application to the appropriate Magistrate and such Magistrate shall proceed to recover from such person the amount specified thereunder as if it were a fine imposed by him.
In certain situations, if a person fails to pay a required amount, the proper officer has the authority to take action to ensure payment. Here are the steps they can take:
1. Distraint of Property (Clause d):
The proper officer can seize any property, whether it's movable or immovable, that belongs to or is under the control of the person who owes the amount. This property will be held until the outstanding amount is paid. If the amount remains unpaid for thirty days after the seizure, the officer can sell the property. The money obtained from the sale will be used to cover the owed amount and any associated costs. If there is any surplus money after settling the dues, it will be returned to the person.
2. Certificate for Recovery (Clause e):
The proper officer can create a certificate stating the amount owed by the person. This certificate is then sent to the Collector of the district where the person owns property, resides, or conducts business. The Collector or an authorized officer will use this certificate to recover the specified amount from the person, treating it like an arrear of land revenue.
3. Application to Magistrate (Clause f):
In certain situations, the proper officer can take legal action by filing an application with the appropriate Magistrate. The Magistrate will then proceed to recover the specified amount from the person, treating it as if it were a fine imposed by the Magistrate. This process is not bound by the usual procedures outlined in the Code of Criminal Procedure, 1973.
Section 79(2)
Where the terms of any bond or other instrument executed under this Act or any rules or regulations made thereunder provide that any amount due under such instrument may be recovered in the manner laid down in sub-section (1), the amount may, without prejudice to any other mode of recovery, be recovered in accordance with the provisions of that sub-section.
Section 79(3)
Where any amount of tax, interest or penalty is payable by a person to the Government under any of the provisions of this Act or the rules made there-under and which remains unpaid, the proper officer of State tax or Union territory tax, during the course of recovery of said tax arrears, may recover the amount from the said person as if it were an arrear of State tax or Union territory tax and credit the amount so recovered to the account of the Government.
Section 79(4)
Where the amount recovered under sub-section (3) is less than the amount due to the Central Government and State Government, the amount to be credited to the account of the respective Governments shall be in proportion to the amount due to each such Government.
Explanation For the purposes of this section, the word person shall include "distinct persons" as referred to in sub-section (4) or, as the case may be, sub-section (5) of section 25.
Section 2: Recovery Methods
When a bond or any other document under this Act states that an amount can be recovered as outlined in sub-section (1), that amount can be recovered accordingly. This is in addition to any other methods of recovery available.
Section 3: Unpaid Tax, Interest, or Penalty
If a person has unpaid tax, interest, or penalty under this Act, the proper officer of State tax or Union territory tax can recover the amount during the process of recovering tax arrears. This recovery is done as if it were an arrear of State tax or Union territory tax, and the recovered amount is credited to the Government's account.
Section 4: Proportional Crediting to Central and State Governments
If the amount recovered under Section 3 is less than what is due to both the Central Government and State Government, the credited amount is distributed in proportion to what is owed to each government.