GST interest demand requires adjudication and hearing when liability is disputed; summary recovery without notice was quashed.

Where an assessee disputes the levy or quantification of GST interest, the demand cannot be conclusively enforced without following the statutory adjudicatory process and observing natural justice. The availability of a statutory appeal did not bar writ jurisdiction because the challenge concerned the procedure adopted and the absence of a proper show-cause notice before the summary order. The Court held that, once objections were raised to the interest demand, adjudication under the demand provisions was required before recovery. The impugned summary demand orders were quashed, with liberty to proceed afresh in accordance with law after issuing a proper notice and giving an opportunity to respond.

---

---

Issues: (i) Whether the writ petition was maintainable despite the availability of a statutory appeal; (ii) Whether interest liability under the GST law could be fastened and recovered without initiation of adjudication proceedings when the assessee disputed the demand of interest.

Issue (i): Whether the writ petition was maintainable despite the availability of a statutory appeal.

Analysis: The challenge was not confined to the quantum of demand but extended to the manner in which the impugned interest liability was imposed, after the petitioner disputed the demand in response to the intimation. The proceedings culminated in a summary order without issuance of a proper show-cause notice under the adjudicatory provision. In such circumstances, the availability of an alternative statutory remedy does not bar writ jurisdiction where there is a violation of natural justice or the action is taken without following the prescribed procedure.

Conclusion: The writ petition was maintainable.

Issue (ii): Whether interest liability under the GST law could be fastened and recovered without initiation of adjudication proceedings when the assessee disputed the demand of interest.

Analysis: Interest under the GST framework may be payable on delayed tax payment, but where the assessee disputes the liability itself, including the calculation or leviability of interest, the proper course is to initiate adjudication under the demand provisions and afford an opportunity of hearing. The record showed that after the intimation in FORM GST DRC-01A, the petitioner filed objections, yet no show-cause notice under the applicable demand provision was issued before the summary order in FORM GST DRC-07 was generated. The Court held that this course breached the statutory procedure and the principles of natural justice.

Conclusion: Interest could not be finally fastened and recovered in the manner adopted, and adjudication under the demand provisions was required before enforcement.

Final Conclusion: The impugned summary demand orders were quashed, with liberty to the authorities to proceed afresh in accordance with law after issuing a proper show-cause notice and granting an opportunity to respond.

Ratio Decidendi: Where an assessee disputes the levy or quantification of GST interest, the demand cannot be conclusively enforced without following the statutory adjudicatory process and observance of natural justice.

---