Court clarifies interest payment vs. coercive recovery under GST Act

The Court disposed of the Writ Petition challenging the Deputy Commissioner of State Tax's orders for direct recovery of interest under Section 50 of the GST Act. The Respondent clarified that the notifications were for interest payment due to late filing, not coercive recovery. The Court emphasized procedural compliance, digital signing validity, and the necessity of providing parties with a hearing opportunity before initiating recovery actions under the GST Act.

---

---

Issues:
Challenge to orders of Deputy Commissioner of State Tax for direct recovery of interest under Section 50 of GST Act without following proper procedure.

Analysis:
The Petitioner challenged orders dated 17th February, 2020 and 19th June, 2020 issued by the Deputy Commissioner of State Tax, alleging contravention of Section 78 of the GST Act. The Petitioner contended that the Deputy Commissioner sought to recover interest under Section 50 through coercive provisions of Section 79 without providing the mandatory three-month breathing period post-order. Moreover, the Petitioner objected to the lack of show cause notice and hearing, raising concerns about the undisclosed interest calculation.

The Respondent, in its Affidavit in Reply, denied the Petitioner's conclusions and clarified that the email notifications were merely intimations of interest payment due to late filing of Return-GSTR 3B. The Respondent assured adherence to the proper recovery procedure, including issuing show cause notices, calculating interest, and following legal provisions. Consequently, the Petitioner's counsel, relying on the Respondent's statement in the affidavit, did not pursue the reliefs sought in the Writ Petition.

In light of the Respondent's clarification and commitment to follow due process, the Court disposed of the Writ Petition. The order emphasized digital signing for validity and instructed all concerned parties to act upon receipt of a digitally signed copy via fax or email. The case highlights the importance of procedural compliance and the significance of providing parties with an opportunity to be heard before initiating coercive recovery actions under the GST Act.

---