The GST defaulter can be the person entitled to the decree money
CGST rule 146 applies where an amount is payable to the defaulter in execution of a civil-court decree for money or for sale in enforcement of a mortgage or charge. The proper officer sends FORM GST DRC-15 to that court; subject to the Code of Civil Procedure, the court executes the attached decree and credits net proceeds towards recovery. This is not simply a direction to make the GST defaulter pay a fresh court fine.
Checked on 25 October 2026, this guide addresses the decree, court request and recovery reconciliation. The underlying GST demand and its enforceability must already be established. The civil judgment debtor and the GST defaulter may be different persons. Identify both before compiling the working; reversing their roles can make the entire amount schedule misleading.
Link the decree and execution record to the GST demand
Obtain the decree, execution case details, amount payable, court directions, DRC-15 request and current demand balance. Separate amounts awarded from amounts actually realised and from proceeds actually credited for GST recovery. An unsatisfied decree does not by itself create an equal cash recovery in the GST register. Any execution costs or other deductions used to derive net proceeds need the court record and applicable authority.
Net proceeds and the GST residual are different calculations
The decree may cover principal and court-awarded interest, while the GST demand separately contains its legally established components. Do not use the decree’s interest rate to calculate GST interest. Nor should the GST ledger take the gross execution receipt where a supported court-authorised deduction results in lower net proceeds. Record one unique credit per actual appropriation and connect it to the relevant demand.
If execution proceeds exceed the currently verified GST balance, obtain the court’s directions on application and any residual entitlement. The examples do not prescribe a universal priority against other creditors, a fixed commission or a new distribution formula. Civil-procedure issues and competing claims require their own case-specific review. A reconciliation letter is not itself a stay of execution or recovery.
Keep an evidence chain through closure
Use a three-way control: court realisation statement, transfer or credit evidence, and updated GST appropriation. Distinguish an attachment/request from a completed realisation. For partial recovery, keep both the remaining decree amount and GST balance visible rather than treating them as the same number. Common errors are crediting the full face value immediately, counting a court transfer twice and using DRC-15 as a generic notice for every debt.
Six worked illustrations
All facts and amounts below are fictional. Assumptions describe the model, not additional statutory rules.
Illustrative example 1: Separate award from realisation
Decree amount is ₹8,00,000 but only ₹3,00,000 is realised. Unrecovered decree amount is ₹5,00,000. The uncollected ₹5,00,000 is not already a GST recovery credit.
Illustrative example 2: Calculate court-supported net proceeds
Assume realised funds ₹3,00,000 and a court-authorised deduction ₹20,000. Net available proceeds are ₹2,80,000. This deduction is a stated case input, not a statutory standard fee.
Illustrative example 3: Update the GST balance
Verified GST recovery balance ₹4,50,000 receives an accepted ₹2,80,000 credit from execution. Residual GST balance is ₹1,70,000, assuming no other movement.
Illustrative example 4: Distinguish two interest streams
The court statement shows principal ₹2,00,000 and awarded interest ₹30,000, gross ₹2,30,000. Supported deductions ₹10,000 give net ₹2,20,000. No GST interest is inferred from the ₹30,000 decree-interest line.
Illustrative example 5: Do not double-credit a transfer
A ₹1,50,000 court remittance is recorded by both the bank and GST ledger. Against ₹2,00,000 opening demand, remaining balance is ₹50,000, not negative ₹1,00,000 from counting the same remittance twice.
Illustrative example 6: Identify surplus for directions
Net execution proceeds are ₹3,20,000 and the complete verified GST balance is ₹2,50,000. Difference ₹70,000 requires the applicable court direction and entitlement analysis; it is not automatically more GST due.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Identify the GST defaulter | Demand and taxpayer identity. |
| 2 | Identify the decree entitlement | Certified decree and parties. |
| 3 | Verify execution case scope | Court, case number and operative directions. |
| 4 | Check current GST enforceability | Demand credits, modifications and stays. |
| 5 | Inspect the DRC-15 request | Issuing officer, court and referenced amount. |
| 6 | Reconcile actual realisation | Court receipt and execution statement. |
| 7 | Support net deductions | Court-authorised costs and other deductions. |
| 8 | Credit each recovery once | Unique transfer and appropriation reference. |
| 9 | Resolve excess or competing claims | Applicable court directions and legal analysis. |
| 10 | Confirm the remaining balances | Updated decree and GST schedules with closure evidence. |
Sixteen practitioner FAQs
1. Must the decree be against the GST defaulter?
The rule concerns money payable to the defaulter in the specified execution situation; identify the parties carefully.
2. Is DRC-15 a fresh GST assessment?
No. Trace the existing recoverable demand.
3. Which court receives the request?
The civil court concerned with the specified decree and execution.
4. Does rule 146 bypass the CPC?
No. It expressly operates subject to the Code of Civil Procedure.
5. Is every unpaid invoice a decree?
No. Obtain the actual decree and execution facts.
6. Can mortgage-enforcement sale be within the rule?
The text includes the specified sale in enforcement of a mortgage or charge.
7. Does sending the request prove recovery happened?
No. Track realised and credited proceeds separately.
8. Should face value be credited immediately?
No. An uncollected decree is not cash recovered.
9. Can costs be deducted using an invented percentage?
No. Use supported authorised deductions.
10. Is decree interest the same as GST interest?
No. Keep their legal bases and calculations separate.
11. Can the same transfer appear in two evidence sources?
Yes, but it remains one recovery credit.
12. What if court and GST records differ?
Reconcile transfer dates, references and accepted appropriation rather than forcing one balance.
13. Does this prescribe priority over every other creditor?
No. Competing rights need the actual applicable-law analysis.
14. Can an arithmetic surplus be retained automatically as GST?
No. Seek the relevant directions and entitlement determination.
15. Does asking for clarification itself stay recovery?
No. Obtain appropriate operative relief where required.
16. What proves closure?
The accepted credit and corresponding updated or closed authority records, not a spreadsheet alone.
Conclusion
Rule 146 uses DRC-15 where money is payable to a GST defaulter through execution of the specified civil-court decree. Reconcile court-authorised net proceeds and actual demand credits without confusing the decree debtor with the GST defaulter.