Case Law Details
Mahadeo Construction Co. Vs Union of India (Jharkhand High Court)
High Court held that interest liability under section 50 is although automatic, but it’s computation and demand can be raised only after initiation of Adjudication proceedings under Section 73 or 74 in case the assesse disputes the demand of interest.
Whether garnishee proceedings under Section 79 of the CGST Act can be initiated for recovery of interest without adjudicating the liability of interest, when the same is admittedly disputed by the assesse.
Section 79 of the CGST Act empowers the authorities to initiate garnishee proceedings for recovery of tax where “any amount payable by a person to the Government under any of the provisions of the Act and Rules made thereunder is not paid”. Since in the preceding paragraphs of our Judgment, we have already held that though the liability of interest is automatic, but the same is required to be adjudicated in the event an assesse disputes the computation or very leviability of interest, by initiation of adjudication proceedings under Section 73 or 74 of the CGST Act, in our opinion, till such adjudication is completed by the Proper Officer, the amount of interest cannot be termed as an amount payable under the Act or the Rules. Thus, without initiation of any adjudication proceedings, no recovery proceeding under Section 79 of the Act can be initiated for recovery of the interest amount.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
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