Court quashes recovery notice, directs interest recalculation on correct amount, instructs maintaining specified funds pending review.

The Court quashed the recovery notice issued by respondent No.4 and directed a recalculation of interest based on the payments made by the petitioner. Respondent No.4 was instructed to maintain a specific amount in the petitioner's bank account pending further review. The Court found the interest calculation incorrect as it was levied on the declared amount rather than the unpaid dues, deeming the order unsustainable. The petitioner's counsel estimated the due amount not to exceed INR 5 lakhs, with agreed interest at INR 7,03,733.58, leading to the direction to maintain INR 5 lakhs towards recovery.

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Issues:
Challenge to recovery notice, Mandamus to consider application under SVLDR scheme, Grant of personal hearing, Refund of recovered amount, Validity of recovery notice, Computation of interest, Sustainability of order, Quashing of recovery notice, Recalculation of interest, Direction to maintain specific amount in bank account.

Analysis:
The petitioner filed a writ petition challenging a recovery notice issued by respondent No.1 and sought a mandamus to consider the application under the SVLDR scheme. The petitioner also requested a personal hearing and refund of INR 4,06,781 recovered illegally. The petitioner, engaged in Event Management and Air Travel Agent services, had applied for the VCES scheme for the period 2012-13. Despite paying 50% of the tax dues, financial constraints led to a delay in the remaining payment. The Assistant Commissioner proposed to recover short-paid duty, but the petitioner had paid the principal amount in full by 2019. The recovery notice indicated an interest amount of INR 17,29,765, which the petitioner contested in the writ petition.

Upon hearing both parties, the Court focused on the validity of the recovery notice issued by respondent No.4. The Court examined the petitioner's payment history and found the interest calculation incorrect. The Court noted that interest should have been computed on unpaid dues, not the declared amount. As the interest was levied without considering partial payments, the Court deemed the order unsustainable and directed respondent No.4 to recompute the interest based on the payments made towards the declared amount. The petitioner's counsel argued that the due amount would not exceed INR 5 lakhs, with interest at INR 7,03,733.58. Respondent's counsel agreed to this and suggested maintaining INR 5 lakhs towards recovery.

The Court disposed of the writ petition, quashing the recovery notice and directing respondent No.4 to recalculate the interest based on the payments made by the petitioner. The Bank was instructed to allow the petitioner to operate the account with a balance exceeding INR 5 lakhs, withholding the specified amount pending further consideration by respondent No.4. The Court did not address certain reliefs sought by the petitioner but kept the contentions open for future consideration.

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