Notices, Demands & Recovery

Transfer of property to be void in certain cases

Section 81, CGST Act

Chapter 15 Text as on 2026-09-05 Source CBIC

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Amendment history

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Section 81 makes any TRANSFER of property done to defraud revenue VOID against the tax claim (with protection for bona fide buyers for value without notice).

What this means in practice

The parts that actually decide cases — the things a practitioner checks first.

A transfer made after the dues became payable, with intent to defraud revenue, is void against the department; a purchaser for value without notice is protected – so due diligence on GST dues before buying an asset matters.

The exact words of the law

831 characters, unedited

Reproduced from the CBIC text. We explain it above — but you should always be able to read it yourself.

Read the full provision+

* Section 81. Transfer of property to be void in certain cases.- Where a person, after any amount has become due from him, creates a charge on or parts with the property belonging to him or in his possession by way of sale, mortgage, exchange, or any other mode of transfer whatsoever of any of his properties in favour of any other person with the intention of defrauding the Government revenue, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the said person: Provided that, such charge or transfer shall not be void if it is made for adequate consideration, in good faith and without notice of the pendency of such proceedings under this Act or without notice of such tax or other sum payable by the said person, or with the previous permission of the proper officer.

High Court cases on this section

Judgments in our index that cite this provision. Being listed does not make a case good law — it may have been appealed or distinguished since. Read it before relying on it.

ALLOWED Madras High Court · 2024-06-10

Azhahagammal v. The Assistant Commissioner (ST)

Read the judgment PDF →

What changed, and when

The amendment trail, newest first — because the version that applies to your case depends on the period.

2017-07-01 · Commenced

Provision as originally enacted in the CGST Act, 2017 (Act 12 of 2017) and brought into force w.e.f. 01-07-2017.

Where this comes from

Text reproduced from the Central Board of Indirect Taxes and Customs, as available on 2026-09-05. The explanation and practice notes above are GSTZone’s own, written for this hub. If you spot anything out of date, tell us and we’ll fix it — this hub is checked daily against CBIC.

transfer to defraud voidsection 81

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