The property can be attached in cases involving GST evasion, fake invoicing and delay of more than three months in depositing tax collected.
The CBIC has issued the guidelines for provisional attachment of property under GST Act which tasks the Commissioner to exercise due diligence and carefully examine all the facts of the case, including the nature of offence and amount of revenue involved, and also record on file the basis on which he/she has formed such an opinion to attach the property of the taxpayer.
The Board said, “it is reiterated that the power of provisional attachment must not be exercised in a routine/mechanical manner. The remedy of attachment being, by its very nature, extraordinary, has to be resorted to with utmost circumspection and with maximum care and caution”.
The CBIC listed out types of cases where the provisional attachment can be considered to be resorted to subject to specific facts of the case. These include where a taxable person has supplied any goods or services or both without the issue of any invoice with an intention to evade tax; or issued invoice or bill without supply of goods or services or both; or fraudulently availed input tax credit. Also, cases where a taxpayer has collected any amount as tax but has failed to pay the same to the government beyond a period of three months from the date on which such payment becomes due; or fraudulently obtained refund, or passed on input tax credit fraudulently to the recipients but has not paid the commensurate tax would qualify for provisional attachment of property.
The provisional attachment of property would be valid for a period of one year.
“It should be ensured that the value of property attached provisionally is not excessive. The provisional attachment of property shall be to the extent it is required to protect the interest of revenue, that is to say, the value of attached property should be as near as possible to the estimated amount of pending revenue against such person,” the CBIC added.
It said a tax officer should normally attach movable property of a taxpayer only if the immovable property, available for attachment, is not sufficient to protect the interests of revenue.
“In cases where the movable property, including bank account, belonging to a taxable person has been attached, such movable property may be released if the taxable person offers, in lieu of movable property, any other immovable property which is sufficient to protect the interest of revenue. Such immovable property should be of value not less than the tax amount in dispute,” it added.