Levy of interest or Penalty invalid if no proposal in pre-assessment notice

K.Baskaran Vs Assistant Commissioner (ST) (Madras High Court)

Impugned order levies interest under Section 50 as well as penalty under Section 73(9) of Central Goods and Services Tax Act, 2017, over and above, reversal of Input Tax Credit (ITC). Admittedly, there was no proposal in the pre-assessment notice either for levy of interest or penalty. To this extent the impugned order has travelled beyond the scope of the show cause notice.

Thus, to that extent, I set aside the impugned order subject to the petitioner appearing before the respondent with a response to the show cause notice as well as to the levy of interest under Section 50 and penalty under Section 73(9) of the Act as contained in the impugned order on Thursday, 23^rd March, 2023 at 10.30 a.m. without expecting any further notice in this regard.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

Heard Mr.Adithya Reddy, learned counsel for the petitioner and Mr. T.N.C. Kaushik, learned Additional Government Pleader for the respondent.

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