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GST Liability under SARFAESI Bank Auction

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AJM_India

Director

58 Points Posted on 27 June 2025

We are bidding for a commercial office property in Mumbai to be auctioned by a PSU Bank under SARFAESI.

The Property belongs to a Limited Company. This company has GST and Income Tax Outstanding liablities.

As per "VERBAL" assurances from the bank, the new purchaser is not liable for these statutary liablities of the original owner of property if the purchase is done through Bank Auction under SARFAESI.

Can we get some opinion on this matter.

Replies (3)

Quick Summary

This discussion explores GST liability when purchasing a commercial property through a SARFAESI bank auction. The original owner has outstanding GST and Income Tax debts. While the bank verbally assured the new buyer wouldn't be liable, the auction notice now states 'Encumbrances known to Bank - Not Known'. This implies any outstanding liabilities, including GST, may transfer to the bidder, so it's crucial to review the auction terms and conditions thoroughly before bidding.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121521 Points Posted on 27 June 2025

Check the auction 'terms and conditions' released by Bank. Or get its copy before any bid.

AJM_India

Director

58 Points Posted on 27 June 2025

Thanks for the quick response

In the latest advt for auction, bank mentions as below
Details of Encumbrences known to Bank - "Not Known"

In an auction notice paper advt last year for same property, bank had mentioned outstanding amount under below 3 categories
1) Society Dues - XXX
2) Property Tax - XXX
3) GST - XXX

So after several failed auction attempts, bank has decided to remove the amounts from their Sale Notice and instead mentioned "Not Known".