Show cause notice required before appropriation of recovered GST ; unlawfully retained amounts must follow proper proceedings and refund if demand fails.

Recovered amounts cannot be retained without lawful appropriation, and the authority must first issue a proper show cause notice before treating the sum as finally demandable or subject to refund consequences. The respondent was directed to proceed under the GST provisions and complete the process within the stipulated time, while the petitioner was left free to raise all available legal defences in the ensuing proceedings. If the demand is ultimately dropped, the amount must be refunded to the petitioner.

---

---

Issues: Whether the amount recovered from the petitioner could be retained without appropriation in accordance with law, and whether recovery action required issuance of a show cause notice before final demand or refund consequences could follow.

Analysis: The amount collected from the petitioner could not be retained without lawful appropriation. Before appropriating the recovered sum, the authority was required to issue a proper show cause notice. The petitioner was also given liberty to raise all available legal defences in the ensuing proceedings. The Court directed the respondents to proceed under the GST provisions and complete the exercise within the stipulated time, with final adjudication on merits thereafter.

Conclusion: The respondents were directed to initiate proper show cause proceedings and act in accordance with law before retaining the recovered amount. If the demand is dropped, the amount is to be refunded to the petitioner.

---