Let us discuss the following topics in this regard:
Union Budget 2021 Outcome
1st February 2021:
(1) Seizure and confiscation of goods and conveyances in transit are now made as a separate proceeding from the recovery of tax from Section 74.
(2) Self-assessed tax referred to under section 75 of the CGST Act shall also cover the outward supplies/sales as reported in GSTR-1 under section 37 of the CGST Act but which has been missed out while reporting in GSTR-3B under section 39.
(3) The provisional attachment shall remain valid for the entire period starting from the initiation of any proceeding till the expiry of a period of one year from the date of order made thereunder.
(4) With respect to orders received on detention and seizure of goods and conveyance, 25% of penalty needs to be paid for making an application of appeals under section 107 of the CGST Act. Date of applicability is yet to be notified.
What is the meaning of attachment of property?
If the government attaches the property of a person, the person cannot transfer the said property to anyone else. Even if he does manage to transfer the attached property, the transfer shall be deemed void and thus not recognised by law. Even bank accounts can be attached – he will not be allowed to transfer his funds to any other account.Interpretation of Section 83 of the CGST Act
During the pendency of certain specified proceedings under the CGST Act 2017, the Commissioner can pass an order for attachment of property including bank accounts of the taxpayer to protect the interests of the revenue. Such order may remain in effect up to one year if no action is taken. A copy of this order may be sent to the concerned Revenue Authority, Transport Authority or any such authority to place an encumbrance on the said property. This encumbrance cannot be removed unless instructions have been received from the Commissioner to do so.Circumstances under which Section 83 can be invoked
Section 83 can be invoked during the pendency of the following proceedings:- Section 62: Assessment of non-filers of returns
- Section 63: Assessment of unregistered persons
- Section 64: Summary assessment in certain special cases
- Section 67: Proceedings related to inspection, search and seizure
- Section 73: Demand raised in cases other than those involving fraud or willful misrepresentation of facts
- Section 74: Demand raised in cases involving fraud or willful misrepresentation of facts
Action to be taken by the taxpayer and the Timelimit
If the Commissioner wants to provisionally attach any property (including bank account), he will pass an order in DRC-22 which will contain the details of the property attached. The commissioner can issue DRC-22 anytime after issuance of demand notice under Sections 63, 73 or 74. Similarly, such notice for attachment shall be made only after the issuance of assessment orders under Sections 62 or 64. Upon receipt of this order, the taxpayer can file an objection against it stating that such property was not liable to attachment. This objection must be filed within seven days of attachment of the property. The Commissioner is then bound to give the taxpayer an opportunity of being heard. In case he is satisfied with the response given by the taxpayer, he will release the attached property by passing an order in DRC-23. In case the property attached is of a perishable or hazardous nature, the taxpayer will have to either settle the relevant tax dues or pay the market price for the property, whichever is lower. Upon settlement, the Commissioner will release such property by passing an order in DRC-23. If the taxpayer does not agree to either pay the market price of the property or settle the relevant tax dues, the Commissioner may dispose of the property and apply the proceeds against the dues of the taxpayer.Steps to reply to Notice in DRC-22 on the GST portal
As a prerequisite, keep the reply to the notice typed out and saved in a PDF formatted file. No specific format is specified. However, it needs to be ensured that the file size does not exceed 5 MB. The process of replying to notice in form DRC-22 is similar to notice in DRC-16 (Notice for attachment and sale of immovable/movable goods/shares under section 79). Follow the below step-by-step guide to file a reply to the notice in form DRC-22 on the GST portal: Step 1:Log in to the GST portal with the relevant credentials.



Formats of Notice in DRC-22 and Order in DRC-23
Notice in DRC-22: Provisional attachment of property under section 83:
