2022 (10) TMI 1063 - HC - GST

Levy of Interest - jurisdiction or authority of law under Section 50 of the KGST Act, to levy interest - wrong posting of excess transitional input tax credit in the petitioner's GST portal due to departmental GST portal technical glitch - HELD THAT - A perusal of the show cause notice dated 26.08.2022 issued by the respondents under Section 73(1) of the GST Act read with rule 142 of GST Rules, 2017 will clearly indicate that the petitioner has been merely called upon to show cause as to why the amounts, penalty, interest etc., has detailed in the audit report should not be levied upon him. The said show cause notice also provides an opportunity for personal hearing to the petitioner and who also be entitled to produce pleadings and documents in support of his claim along with the reply to the show cause notice. It is deemed just and appropriate to dispose off this petition reserving liberty in favour of the petitioner to submit his reply/response to the aforesaid show cause notice dated 26.08.2022, along with all relevant documents within a period of one month from today - petition disposed off.

Summary

Issues:
Petitioner seeking writ of Certiorari to set aside impugned Observations issue under KGST Act, challenge of jurisdiction of 4th respondent to levy interest, quashing of Audit Report and Notice, grievance regarding lack of interim order, respondent's submission of no merit in the petition, show cause notice under GST Act issued to petitioner, opportunity for personal hearing and submission of reply, disposal of the petition with liberty to submit response, direction to not take coercive steps for recovery.

Analysis:
The petitioner sought various reliefs through the petition, including setting aside the impugned Observations issue under the KGST Act and challenging the jurisdiction of the 4th respondent to levy interest. The petitioner also requested the quashing of the Audit Report and Notice. The petitioner raised concerns about the lack of an interim order, allowing the respondents to proceed with audit and recovery actions. On the other hand, the learned AGA representing the respondents argued that the petition lacked merit and should be dismissed.

Upon examining the show cause notice issued by the respondents under the GST Act, it was observed that the petitioner was called upon to show cause regarding the amounts, penalty, and interest detailed in the audit report. The notice provided an opportunity for a personal hearing and submission of pleadings and documents in support of the petitioner's claim. Considering the subsequent events during the pendency of the petition, the court decided to dispose of the petition, reserving the liberty for the petitioner to submit a response to the show cause notice within a month. The court directed the concerned respondents to provide a personal hearing to the petitioner and pass appropriate orders based on the reply and relevant documents.

Furthermore, the court ordered that no coercive steps for recovery should be taken against the petitioner until the reply/response is considered, and appropriate orders are passed after the personal hearing. With the main matter disposed of, incidental applications were also disposed of accordingly. The judgment aimed to ensure procedural fairness by allowing the petitioner to respond to the show cause notice and have a personal hearing before any further actions were taken by the respondents for recovery purposes.