Section 63 DVAT Act - Custody, Return and Disposal of Goods, Goods Vehicles and Security

Section 63 of the Delhi Value Added Tax Act, 2004 governs how goods and goods vehicles seized under the Act are receipted, kept in custody, returned and, in specified circumstances, sold by auction to recover outstanding tax, interest or penalty. The original provision refers to Rule 41 and Form 29 of the Delhi Value Added Tax Rules, 2005.

What is custody, return and disposal under Section 63?

Custody means retaining goods or a goods vehicle seized by the tax authority; return means restoring possession to the person from whom the property was seized; and disposal includes a legally authorised auction to meet arrears of tax, interest or penalty. Section 63 operates in conjunction with Section 61 (stopping, searching and seizing goods vehicles).

Section 63 of the DVAT Act: provisions explained

Section 63(1): Receipt and acknowledgement upon seizure

When the Commissioner seizes goods or a goods vehicle, the Commissioner must give a receipt to the dealer, the person in charge of the goods vehicle, or a person present on that person's behalf, as appropriate, and obtain an acknowledgement of the receipt.

Proviso: If the person from whose custody the goods or goods vehicle are seized refuses to acknowledge the receipt, the Commissioner may leave the receipt in that person's presence and record the refusal. A refusal does not dispense with the requirement to document the seizure.

Section 63(2): Custody, reasonable retention and return

The Commissioner:

1. Must keep in custody any goods or goods vehicle seized under Section 61;
2. May retain the goods or vehicle for such time as the Commissioner considers reasonable; and
3. Must return them to the dealer or other person from whose custody or control they were seized, subject to subsection (3).

The section does not prescribe a single fixed custody period for every seizure: retention is governed by the statutory standard of reasonableness and the auction power in subsection (3).

Section 63(3): Notice before auction for arrears

Where the Commissioner has seized goods, seized a goods vehicle, or holds goods as security for performance of an obligation under the Act, the Commissioner may direct an auction to meet arrears of tax, interest or penalty owed under the DVAT Act. The power is subject to the notice requirement: auction may be directed not sooner than one month after service of notice of the intention to sell on the applicable persons, namely:

1. The person from whom the goods were seized;
2. The person from whom the goods vehicle was seized;
3. The person for whom the security was given; and
4. Any person against whom the security is to be enforced.

Which persons require notice depends on the circumstances of the seizure or security. The one-month period runs from service of the relevant notice, not merely from the date of seizure.

Section 63(4): Prescribed auction procedure

An auction of goods or a goods vehicle must be carried out in the prescribed manner for sale of property held by the Commissioner. Section 63 does not permit an informal sale outside the applicable prescribed process.

Rule 41 and Form 29

The source page identifies Rule 41 and Form 29 as associated procedural references. The applicable version of the DVAT Rules and prescribed form should be consulted for requirements relevant to the seizure, custody, return, disposal or auction in question; forms and procedures may have changed over time.

Practical steps following seizure

1. Obtain the seizure receipt: Check its description of goods or vehicle, date, officer and identifying particulars; preserve a copy.
2. Verify the legal basis: Examine the Section 61 action, the documents demanded and any written reasons or orders.
3. Request return: Supply available supporting invoices, transport documents and proof of compliance; seek a written response.
4. Check any auction notice: Identify all persons entitled to notice, the date of service, claimed arrears and whether the one-month minimum has elapsed.
5. Review remedies promptly: Examine objections, appeals or other relief available under the law applicable to the particular order and period.

Frequently asked questions

Must an officer give a receipt for seized goods?

Yes. Section 63(1) requires a receipt and acknowledgement. If acknowledgement is refused, the officer may leave the receipt in the person's presence and record the refusal.

Can goods be auctioned immediately after seizure?

Section 63(3) requires notice of intention to sell and permits an auction direction no sooner than one month after service of the applicable notice, subject to the provision's other conditions.

Does Section 63 apply to every GST vehicle detention?

No. The appropriate GST provisions apply where the matter falls under GST rather than the continuing or saved DVAT framework.

Official resources

• Department of Trade and Taxes, Government of NCT of Delhi - DVAT legislation, rules and departmental materials.
• India Code - legislative texts where available.
• GST common portal - current GST compliance information.

This explanatory article retains all four subsections and the proviso reproduced in the original page. For any particular seizure or auction, consult the applicable amended Act, Rules, official notifications and the relevant orders.