Under the Income Tax Act, the State Government has the power to initiate tax recovery proceedings in certain circumstances. These are outlined in Section 226 of the Income Tax Act, 1961. According to this section, if an individual or a company fails to pay their income tax dues, the State Government may initiate tax recovery proceedings. The State Government can do this by issuing a notice of demand to the taxpayer, specifying the amount of tax due, and demanding payment within a specified period of time.
If the taxpayer fails to pay the amount due within the specified period, the State Government can initiate recovery proceedings. These proceedings may include the attachment and sale of the taxpayer’s property, the recovery of the amount due from the taxpayer’s bank account, or any other means deemed necessary by the State Government.
It is important to note that the State Government can only initiate tax recovery proceedings after all other means of recovery have been exhausted. For example, if the taxpayer has any assets that can be attached, the State Government will first attempt to recover the amount due through the sale of these assets. Only if this fails will they proceed with other means of recovery.
In addition, the State Government must follow certain procedures when initiating tax recovery proceedings. For example, they must issue a show-cause notice to the taxpayer, giving them an opportunity to explain why recovery proceedings should not be initiated. The taxpayer must be given a reasonable opportunity to be heard before any action is taken.
It is also worth noting that the State Government can only initiate tax recovery proceedings within a certain time frame. This time frame is generally seven years from the end of the financial year in which the tax was due. Once this time frame has expired, the State Government can no longer initiate tax recovery proceedings.
the State Government has the power to initiate tax recovery proceedings under certain circumstances, such as when an individual or company fails to pay their income tax dues. The State Government must follow certain procedures when initiating these proceedings, and can only do so within a specified time frame. It is important for taxpayers to pay their taxes on time to avoid the possibility of tax recovery proceedings being initiated against them.
