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CA Final · Indirect Tax Laws · Charge of GST

Dues of Rs 25 lakh of tax, interest and penalty are payable by Rathi Industries to the Government under the GST law. A bank also claims priority over the factory it financed, under another law. Ignoring insolvency proceedings, what does section 82 provide?

The tax, interest and penalty together are a first charge on Rathi's property under section 82, overriding any contrary law except as the Insolvency and Bankruptcy Code, 2016 provides. The bank's claim under other law cannot defeat this priority, and the charge is not limited to tax alone.

  1. AThe tax, interest and penalty are a first charge on Rathi's property, notwithstanding contrary lawCorrect
  2. BOnly the tax, not interest or penalty, is a first charge on the property
  3. CThe bank's claim always ranks first under any other law
  4. DThe charge arises only after an assessment order under section 64

Explanation

Section 82 says that notwithstanding any contrary law, and save as provided in the Insolvency and Bankruptcy Code, 2016, any amount of tax, interest or penalty payable to the Government is a first charge on the property of the person. It covers all three components, and it does not depend on a summary assessment under section 64.

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