GST Jamku AITransfer of property to be void in certain cases.
Section 81
Where a person, after any amount has become due from him, creates a charge on or parts with the property belonging to him or in his possession by way of sale, mortgage, exchange, or any other mode of transfer whatsoever of any of his properties in favour of any other person with the intention of defrauding the Government revenue, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the said person:
Provided that, such charge or transfer shall not be void if it is made for adequate consideration, in good faith and without notice of the pendency of such proceedings under this Act or without notice of such tax or other sum payable by the said person, or with the previous permission of the proper officer.
When a person, who owes a certain amount, places a charge on or relinquishes ownership of their property through methods like sale, mortgage, exchange, or any other form of transfer, with the intention of deceiving the government and avoiding tax payments, such a transaction becomes void against any claims related to taxes or other sums owed by that person.
Conditions for Validity: However, there are exceptions to this rule. The charge or transfer will not be considered void if it is carried out for adequate consideration, in good faith, and without awareness of any ongoing legal actions under this Act. Additionally, the transaction will remain valid if it is conducted without knowledge of the tax or other sum owed by the individual or with the prior permission of the designated official.
Conclusion: In essence, while attempting to defraud the government revenue through property transactions can render the charge or transfer void, there are circumstances under which such actions may be deemed valid. Adequate consideration, good faith, and lack of awareness about legal proceedings or outstanding taxes are crucial factors in determining the legitimacy of these transactions.