No tax claims after winding up order of company passed, says CBIC

Tax officers cannot make any tax claim after the winding up order of a company is passed, the Central Board of Indirect Customs has said. The apex indirect taxes body Friday issued detailed guidelines for recovery of arrears and write-offs to prevent multiple tax authorities initiating the recovery process to minimise the scope for harassment for taxpayers or delay on the part of officials.

The circular says in case of a bankrupt defaulter, tax officers cannot make any claims after the date of winding up order of a company, and request for claim should be done within 30 days of commencement of liquidation.

It also provided step-by-step procedure for recovery by attachment of property and sale, setting a deadline of six months to complete the process.


For recovery of departmental arrears, the circular prescribes that claims can be filed with Debt Recovery Tribunal either through direct application or through SARFAESI route to avoid multiple claims and proceedings of the same property.

Experts say that the master circular on the recovery proceedings, which supersede at least 8 different previous circular instructions, will ensure every officer follows the same playbook, making the process more transparent and less harassing for businesses.

Ankur Gupta, Practice Leader- Indirect Tax, SW India, said the circular will ease out efforts of the department to follow a single instruction for initiating recovery proceedings.