Rivera Enterprises Vs Commercial Tax Officer (Madras High Court)
The Madras High Court considered a writ petition challenging an assessment order dated 08.03.2024 and a consequent garnishee recovery order in Form DRC-13 dated 01.09.2025, which sought to recover interest on belatedly availed Input Tax Credit (ITC) of IGST for the tax period 2018–19. Earlier, the petitioner had been issued an intimation in Form GST ASMT-10 on 19.05.2022 requiring reversal of ITC amounting to ₹6,68,257. This demand was successfully challenged before the High Court in a prior writ petition, following statutory intervention by insertion of Rule 16(5) to the GST Rules with retrospective effect from 01.07.2017 through the Finance (No. 2) Act, 2024.
By order dated 02.07.2025, the High Court had already set aside the earlier ITC reversal, holding that the belatedly availed ITC stood regularised retrospectively. Despite this, the authorities proceeded to initiate recovery of interest on the same ITC through the impugned assessment and garnishee orders. The Court noted that the IGST amount mentioned in the impugned orders corresponded to the same ITC earlier regularised and observed that the recovery action was prima facie arbitrary. Since the principal ITC itself stood regularised by statutory amendment and judicial order, the basis for levying interest could not survive without fresh consideration.
