2024 (5) TMI 1137 - HC - GST

Validity of notice by which GST-interest liability on account of delay in payment of GST has been issued - notice has been issued on a pre-judged determination of interest liability without affording any opportunity of hearing - Violation of principles of natural justice - HELD THAT - The contents of the notice clearly show that in case opportunity of voluntary compliance as suggested was not availed appropriate action for recovery of interest shall be initiated under Section 79 of the CGST Act 2017 and corresponding provisions under IGST Act 2017 and RGST Act 2017. Therefore the notice only gives the petitioner an opportunity to make voluntary compliance. It goes without saying that if the petitioner is not accepting the same and not making voluntary compliance the respondents would be initiating proceedings under Section 79 of the CGST Act 2017. There is no reason at this stage to hold that the petitioner would not be given proper opportunity of hearing against proposed recovery. The petitioner is disposed off.

Summary

Issues involved: Challenge to GST-interest liability notice u/s Article 226 of the Constitution of India without opportunity of hearing.

Summary:
The petitioner challenged the correctness and validity of a notice dated 08.02.2020 imposing GST-interest liability for delay in payment of GST u/s Article 226 of the Constitution of India. The notice required the petitioner to calculate the interest liability and deposit it within 3 days, failing which recovery proceedings u/s 79 of the CGST Act, 2017 would be initiated. The petitioner did not respond to the notice but filed a petition. The court noted that the notice provided an opportunity for voluntary compliance and held that if the petitioner did not comply, proceedings u/s 79 of the CGST Act, 2017 could be initiated. The court emphasized that the petitioner would be given a proper opportunity of hearing before any recovery action. The court did not comment on the merits of the case and disposed of the writ petition.