2020 (3) TMI 978 - HC - GST

Deposit of Interest - Section 50 of the Central Goods and Sales Tax Act, 2017 - HELD THAT - Respondents submits that the impugned communications, in fact, afford the Petitioner an opportunity for voluntary compliance. In case this opportunity is not availed by the Petitioners, appropriate legal action for recovery of the interest due for the delay in filing of returns shall be initiated. She clarifies that this means that a show cause notice will be issued. Upon service of such show cause notice, the Petitioners will be given an opportunity to put-forth its case and in that sense, there will be compliance with the principles of nature justice. The statements made by respondents is accepted on the basis of instructions. In view of such statements, it is not necessary to entertain the present Petition since, the apprehensions expressed by the Petitioner in this Petition, stand substantially redressed at the present stage. By granting liberty to the Respondents to issue necessary show cause notice in accordance with law, the petition is disposed off.

Summary

Issues:
Challenge to communications advising deposit of interest amounts under Section 50 of the Central Goods and Sales Tax Act, 2017 without adjudication or compliance with principles of natural justice and fair play.

Analysis:
The petition challenged communications dated 7th February, 2020 and 17th February, 2020, advising the petitioners to deposit certain interest amounts calculated by the system under Section 50 of the CGST Act, 2017. The petitioner's counsel contended that there was no adjudication or adherence to natural justice principles before issuing the impugned communications. On the other hand, the respondents' counsel stated that the communications were merely informative and provided an opportunity for voluntary compliance. It was clarified that failure to comply would lead to legal action for interest recovery, including issuing a show cause notice, allowing the petitioners to present their case. The court accepted the respondent's submissions, finding that the communications did not entail coercive action and granted liberty to issue a show cause notice in line with the law, disposing of the petition accordingly.

The court emphasized that it did not make any determinations on the parties' arguments, leaving all contentions open for consideration by the appropriate authority at the suitable stage. The petition was concluded without any cost orders, highlighting that the respondent was permitted to proceed with issuing a show cause notice, ensuring compliance with legal procedures and principles of natural justice.