Modvat credit reversal before show cause notice avoids Section 11AB interest

The Karnataka HC held that interest under Section 11AB cannot be imposed if modvat credit is reversed by the assessee before any show cause notice. The decision aligned with a precedent from the Punjab & Haryana HC, resulting in the petition being allowed for the assessee.

---

---

The Karnataka High Court ruled that interest under Section 11AB cannot be levied if modvat credit remains unutilized and is reversed by the assessee before any show cause notice is issued. The judgment was based on a similar ruling by the Punjab & Haryana High Court. The petition was allowed in favor of the assessee.

---