Bombay Art Vs Union of India (Gujarat High Court)
Gujarat High Court held that recovery of interest amount which became due u/s. 50(1) of the CGST Act can be done only after issuance of intimation in Form GST DRC-01D. Accordingly, order quashed with direction to department to initiate proceedings by issuance of notice in Form GST DRC-01D.
Facts- This petition is filed under Article 226 of the Constitution of India praying to quash the notice dated 27.03.2023 and all the subsequent notices issued by the respondent no. 3 determining the demand of Rs. 28,16,834/- on account of short payment of interest on delayed payment of tax u/s 50 of the CGST Act r.w.s. GGST Act by invoking provisions u/s 75(12) of CGST Act r.w.s. GGST Act and without initiating assessment proceedings.
Conclusion- Held that the respondent authority can recover the amount of interest which has become due as per the provisions of Section 50(1) of the Act read with Rule 88(B) and 80(C) of the GST Rules under Section 79(1) of the Act only after issuance of intimation in Form GST DRC-01D. Once the relevant Form GST DRC-01D is issued by the department, it will be treated as notice for recovery as provided under Rule 142B of the GST Rules. Without following the procedure of issuance of Rule 142B of the GST Rules, the respondent authority cannot make any effective recovery of interest. Therefore, on the basis of such observation the impugned notice dated 20.5.2024 is quashed and set-aside with a direction that the department can initiate proceedings by adopting proper procedure with issuance of notice in Form GST DRC 01D. However, the same would be subject to providing opportunity to file reply as well as opportunity of hearing. In view of the above observations, the present petition is allowed.
