GST interest recovery limited to net cash liability, with gross-liability notices kept pending pending amendment.

Interest under section 50 of the CGST Act is to be recovered only on the net cash tax liability, and field formations are to keep show cause notices based on gross tax liability in the Call Book pending retrospective amendment of section 50. In view of these administrative instructions issued after the GST Council's decision, the petitioner's challenge to gross-liability recovery was treated as having been addressed by the respondents. The grievance was therefore held not to survive for further adjudication, and the petition was disposed of in terms of the administrative direction.

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Issues: Whether interest under section 50 of the Central Goods and Services Tax Act, 2017 is recoverable only on the net cash tax liability and, in view of the administrative instructions issued by the Central Board of Indirect Taxes and Customs, the petitioner's grievance survives for adjudication.

Analysis: The administrative instructions issued after the GST Council's decision directed field formations to recover interest only on the net cash tax liability for the relevant period and to keep show cause notices based on gross tax liability in the Call Book pending retrospective amendment of section 50. In light of this stand, the Court treated the petitioner's challenge as having been met by the respondents' own administrative direction.

Conclusion: The petitioner's grievance was held to no longer survive, and the petition was disposed of in terms of the respondents' administrative instructions.

Final Conclusion: The proceedings ended on the basis that interest recovery would be confined to the net cash liability, and the pending challenge was brought to a close without further adjudication on the reliefs sought.

Ratio Decidendi: Where the competent tax administration itself directs recovery of GST interest only on the net cash tax liability and defers contrary proceedings pending retrospective amendment, the challenge to gross-liability recovery becomes unnecessary for adjudication.

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