Section 79 – Recovery of Tax
Section 79 of CGST Act, 2017 – Recovery of Tax
Updated on: February 2026 (as applicable till date)
Prepared by: Yours Tax Consultant
1. Objective of Section 79
Section 79 provides the statutory methods for recovery of tax, interest, penalty or any other amount payable to the Government under GST.
This section comes into operation after the time limit under Section 78 expires or where recovery is otherwise permitted by law.
2. When Can Recovery under Section 79 Be Initiated?
Recovery proceedings under Section 79 may be initiated when:
- Tax dues are confirmed by an order
- Payment is not made within time prescribed under Section 78
- No stay is in force due to appeal or court order
Section 79 deals with the mode of recovery, not determination of liability.
3. Statutory Provision – Section 79 (Overview)
Where any amount payable by a person to the Government under this Act is not paid, the proper officer may proceed to recover the amount by one or more of the modes specified in Section 79.
4. Modes of Recovery under Section 79
4.1 Deduction from Amounts Owed – Section 79(1)(a)
The proper officer may:
- Deduct the amount from any money owed to such person by the Government
Example:
- Adjustment against pending refunds
4.2 Recovery from Third Person (Garnishee Proceedings) – Section 79(1)(c)
The proper officer may:
- Issue notice to any person who owes money to the defaulter
- Direct such person to pay the amount to Government
Common example:
- Attachment of bank accounts
4.3 Detention and Sale of Goods – Section 79(1)(b)
The officer may:
- Detain goods belonging to the defaulter
- Sell such goods to recover dues
This is usually used when movable assets are available.
4.4 Attachment and Sale of Property – Section 79(1)(d)
The officer may:
- Attach movable or immovable property
- Sell such property through auction
This includes land, building, machinery, etc.
4.5 Recovery as Arrears of Land Revenue – Section 79(1)(e)
The officer may:
- Recover tax dues as arrears of land revenue
- Through district administration
This invokes revenue recovery machinery of the State.
4.6 Recovery through Court – Section 79(1)(f)
The proper officer may:
- File an application before a Magistrate
- Seek recovery as a fine imposed by court
5. Multiple Modes of Recovery
The department may:
- Adopt more than one mode of recovery
- Proceed simultaneously or sequentially
However, recovery cannot exceed the amount due.
6. Recovery from Company Directors and Others
Section 79 must be read with:
In certain cases, directors, partners or other persons may also be proceeded against.
7. Safeguards and Limitations
Recovery under Section 79:
- Cannot be initiated without valid demand
- Cannot override appellate stay
- Must follow principles of natural justice
Illegal or premature recovery is challengeable in courts.
8. Section 79 vs Provisional Attachment
- Section 79: Recovery after demand is confirmed
- Section 83: Provisional attachment during proceedings
Both operate at different stages.
9. Practical Scenarios
- Bank account attachment after order under Section 73/74
- Adjustment of refund against demand
- Auction of attached property
10. Judicial Principles
Courts have consistently held that:
- Recovery without considering appeal rights is illegal
- Bank attachment should be proportionate
- Coercive recovery should be last resort
11. Related Provisions
12. Professional Insight
Section 79 is the sharpest tool in GST enforcement. Timely appeal, pre-deposit and stay are essential to prevent irreversible recovery actions. Once bank accounts are attached, business continuity itself comes at risk.
Disclaimer: This article is prepared based on the CGST Act, Rules, notifications and prevailing legal position as applicable till date. Recovery actions are subject to judicial review and must follow due process of law.
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