Section 46A: Provisional Attachment to Protect Revenue
Section 46A of the Delhi Value Added Tax Act, 2004 (DVAT Act) empowers specified tax authorities to provisionally attach movable or immovable property during an inquiry, proceeding, inspection or search where attachment is considered necessary to safeguard revenue. It is a protective measure, not itself a final assessment, sale or determination of tax liability.
Section 46A: statutory provisions
Sub-section (1): When provisional attachment is permitted
Where, during the course of inquiry of any proceeding including any proceeding for recovery of any amount due in respect of any person or dealer, or during any inspection or search in relation to the business of any person or dealer under the Act, the Commissioner is of the opinion that it is necessary for protecting the interest of revenue, the Commissioner may, notwithstanding anything contained in any law for the time being in force or any contract to the contrary, by order in writing provisionally attach any movable or immovable property belonging to that person or dealer.
Sub-section (2): Duration and safeguards
Every provisional attachment ceases to have effect six months after the date of the order under sub-section (1), unless validly extended.
- First proviso: The Commissioner may extend the period for reasons recorded in writing. The total period of extension cannot exceed two years.
- Second proviso: The Commissioner may revoke the attachment order if the person or dealer furnishes a bank guarantee within the time and for the period specified by the Commissioner.
- Third proviso: The power must be exercised by the Commissioner personally or by an Additional Commissioner to whom the Commissioner has delegated it.
Meaning of important legal expressions
- Provisional attachment
- A temporary legal restraint on dealing with specified assets to protect possible recovery. It does not, merely by its issuance, establish a final tax debt.
- Movable and immovable property
- Movable property can include goods and other movable assets; immovable property generally includes land and buildings. The order must concern property belonging to the affected person or dealer.
- Interest of revenue
- The public authority's interest in ensuring that legally recoverable tax or other dues are not frustrated. The statutory opinion must relate to protecting that interest, rather than routine use of attachment in every inquiry.
- Reasons recorded in writing
- A written statement of reasons required by the first proviso when extending the original attachment period.
- Bank guarantee
- A bank's undertaking securing payment up to its specified terms and amount; the second proviso permits revocation of attachment when the Commissioner accepts a guarantee meeting the specified requirements.
How the provision operates
- Relevant DVAT action: An inquiry, recovery proceeding, inspection or search must be underway within the circumstances described in section 46A(1).
- Revenue protection assessment: The competent authority forms an opinion that attachment is necessary to protect revenue.
- Written order: The order identifies the affected person or dealer and property proposed to be provisionally attached.
- Review of duration: The initial six-month period and any extension must be calculated from the order, applying the statutory maximum and written-reasons requirement.
- Possible revocation: The person or dealer may propose a bank guarantee on the terms specified by the Commissioner; the Commissioner may revoke the order under the second proviso.
Related DVAT recovery provisions
Section 43 deals with recovery of tax and other amounts due. Section 44 applies the land-revenue recovery framework. Section 45 addresses continuation of recovery after objection or appeal. Section 46 provides a special mode of recovery, while Section 47 addresses transfers of assets during proceedings. These provisions have distinct prerequisites and consequences.
Frequently asked questions
Does a provisional attachment automatically last two years?
No. The original order ceases after six months unless extended. Extensions require recorded reasons, and the total extension may not exceed two years.
Can a bank guarantee lead to release of property?
Yes. The second proviso allows the Commissioner to revoke an order when a bank guarantee is furnished within the time and for the period specified. Revocation is governed by the statutory wording and the Commissioner's order.
Can any VAT officer issue an order under section 46A?
No. The third proviso reserves the power to the Commissioner or an Additional Commissioner with delegated authority.
Official legal resources
For the current consolidated text, amendments, notifications and case-specific orders, consult the Department of Trade and Taxes, Government of NCT of Delhi, the India Code legislation database, and the Delhi GST Department. The wording of a provision and its applicability should be checked against the official law applicable to the relevant tax period.
This is a general explanation of the DVAT provision. The validity of a particular attachment depends on the applicable statutory text, delegation, facts, order and any binding judicial directions.