Rule 144 governs recovery by sale of a defaulter’s goods already under the proper officer’s control under section 79(1)(b). It requires an inventory and estimated market value, sale only of the quantity necessary for dues and recovery expenditure, and an auction notice in DRC-10. Its ordinary notice and successful-bid payment periods are each fifteen days, attached to different events. Read rule 144 and section 79 in the 2026 GST bare-law compilation.
Identify the recovery route before using the clock
This rule is not the general property-attachment auction under rule 147 or the transit-detention penalty-sale route under rule 144A. The same form number can appear in more than one route. Verify ownership, officer control, recoverable dues and any operative stay before analysing the auction. A bidder should retain the actual notice and lot description, not rely on an informal reference to seized goods.
Under rule 144(3), the last bid-submission day or auction date must not be earlier than fifteen days from issue of the DRC-10 notice. The officer may sell forthwith where goods are perishable or hazardous, or likely custody expenses exceed their value. Document the stated exception and evidence; routine warehousing cost is not automatically a reason to ignore the ordinary period.
Separate the bid, deposit and final payment
The officer may specify a pre-bid deposit; the rule does not impose a universal percentage. Unsuccessful-bidder return and successful-bidder forfeiture on failure to pay are addressed in sub-rule (4). Read the notice’s terms for actual deposit amount and adjustment. Sub-rule (5) requires DRC-11 to the successful bidder calling for payment within fifteen days from auction. Full payment precedes transfer of possession and DRC-12 certification. Winning the bid alone is not the final handover record.
Sub-rule (6) mandates cancellation and release where the defaulter pays dues and incurred recovery expenses before issue of the auction notice. That precise trigger should not be rewritten as an unconditional right to cancel at any later stage. Obtain the officer’s written decision for a later settlement. Sub-rule (7) provides cancellation and re-auction where no bid arrives or the process is considered non-competitive for inadequate participation or low bids.
The examples use fictional, divisible goods and established values solely to test the working; actual market realisation may differ. Date examples exclude the issue/auction day when adding the stated interval and identify a calendar-date floor or outer date; check service, timing and any applicable legal calendar issue in the actual notice. Administrative expenses are stated inputs, not statutory fixed fees. Allocation of realised proceeds is a separate rule 154 exercise.
Six worked illustrations
All facts and amounts below are fictional. Assumptions describe the model, not additional statutory rules.
Illustrative example 1: Sale quantity tied to dues
Dues are ₹2,40,000 and established recovery expenditure ₹10,000. Identical divisible lots are estimated at ₹25,000 each. The recovery target is ₹2,50,000, equivalent to ten lots. Do not automatically auction twenty available lots merely because they are in custody; reconsider the quantity if the supported realisation estimate changes.
Illustrative example 2: Ordinary notice interval
DRC-10 is issued on 1 November 2026. Adding fifteen calendar days gives 16 November 2026 as the ordinary date floor on the stated counting assumption. A 12 November auction is only eleven elapsed days after issue and does not meet that ordinary interval absent an applicable exception.
Illustrative example 3: Successful-bid payment period
The auction takes place on 20 November 2026. Fifteen calendar days later is 5 December 2026. Check DRC-11 against the statutory payment period measured from auction, rather than restarting a fresh fifteen days merely from a later internal processing date.
Illustrative example 4: Notice-specific deposit reconciliation
The bid is ₹3,00,000 and a ₹30,000 deposit has been paid. Assume the actual terms expressly credit that deposit toward the bid. The remaining bid consideration is ₹2,70,000. The 10% implied by this example is an assumed notice term, not a rule 144 statutory deposit rate.
Illustrative example 5: Pre-notice settlement
Before DRC-10 is issued, the defaulter pays ₹1,80,000 dues and ₹7,500 incurred recovery expenses. Total payment is ₹1,87,500. On these facts sub-rule (6) requires cancellation and release. Paying only ₹1,80,000 leaves ₹7,500 of the stated expenses uncovered.
Illustrative example 6: Custody-cost exception
Goods have a supported estimated value of ₹12,000 and documented likely custody expenses of ₹15,000. Expenses exceed value by ₹3,000, bringing the stated facts within the custody-cost exception for possible forthwith sale. An estimate of ₹9,000 instead leaves value exceeding custody costs by ₹3,000 and does not meet this particular exception; check the separate perishability or hazard grounds if relevant.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Identify the statutory route | Section 79(1)(b) and rule 144 basis in the recovery file. |
| 2 | Verify ownership and control | Inventory, custody record and ownership evidence. |
| 3 | Confirm recoverable dues | Demand, payments and any operative stay or modification. |
| 4 | Estimate value and expenses | Market-value support and incurred or likely recovery-cost records. |
| 5 | Limit the quantity | Documented dues-plus-expenses target and lot selection. |
| 6 | Check DRC-10 | Goods, purpose, issue date and auction or bid closing date. |
| 7 | Test any shortened process | Perishability, hazard or custody-cost evidence supporting the exception. |
| 8 | Review deposit terms | Actual notice requirement, payment proof and adjustment/return conditions. |
| 9 | Track DRC-11 payment | Auction-date calendar, full consideration and reconciliation. |
| 10 | Complete closure | DRC-12 and possession record, or written cancellation and release/re-auction trail. |
Sixteen practitioner FAQs
1. Does every sale of seized goods use rule 144?
No. Identify whether officer-controlled recovery, attached-property sale or transit-detention penalty recovery is involved.
2. What is DRC-10’s role here?
It identifies goods and the purpose of sale in the auction process.
3. Is the notice period fifteen working days?
The rule says fifteen days, not working days; review the applicable counting rules and actual notice.
4. Which event starts that period?
Issue of the auction notice under sub-rule (2), for the bid-submission or auction floor.
5. Can perishables be sold sooner?
The proviso permits forthwith sale on its stated grounds.
6. Does any custody expense justify immediate sale?
No. This particular ground compares likely custody expenses with value.
7. Can all available stock be sold automatically?
Sub-rule (1) limits sale to so much as required for dues and administrative recovery expenditure.
8. Is the inventory value a guaranteed sale price?
No. It is an estimate; reassess quantity and realisation evidence appropriately.
9. Is pre-bid deposit always 10%?
No. The officer specifies it; the example’s percentage is only an assumed term.
10. Can a successful bidder stop after paying the deposit?
No. Full bid payment is required for the stated possession transfer and certificate.
11. Which form calls for successful-bid payment?
DRC-11 under rule 144(5).
12. When is that payment period measured from?
The auction date, under the rule’s fifteen-day requirement.
13. What does DRC-12 add?
It is the certificate issued on full payment with the goods-possession transfer under this process.
14. When does mandatory pre-notice cancellation apply?
When dues and incurred recovery expenses are paid before issue of the auction notice under sub-rule (2).
15. What if no competitive bids arrive?
Sub-rule (7) provides for cancellation and re-auction on the stated grounds.
16. Does this article allocate the auction surplus?
No. Distribution of proceeds requires the separate rule 154 reconciliation.
Conclusion
Check a rule 144 recovery auction against its goods inventory, necessary sale quantity, fifteen-day notice and payment periods, and the DRC-10/11/12 record.