GST inspection deposits must be adjusted against final liability if found excessive after adjudication.

Amount deposited during GST inspection proceedings should not be finally treated as payable without adjudication where no substantive recovery notice has yet been issued. The HC held that any excess deposit, if ultimately found on final adjudication, is to be adjusted either against the liability determined or against any amount due in favour of the petitioner. It also observed that inspection-related proceedings under the GST framework should be concluded expeditiously. Relief was granted only to that limited extent.

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Issues: Whether the amount deposited during GST inspection proceedings could be retained or was liable to be adjusted if found excessive at the time of final adjudication.

Analysis: The petition arose from a deposit made during proceedings initiated under the State Goods and Services Tax regime. The Court accepted that the authorities had not yet issued a notice under the substantive recovery provisions and that the dispute, at this stage, concerned the treatment of the amount already deposited. In the circumstances, and on the alternative relief sought, the Court considered it appropriate that any amount deposited in excess should not be finally treated as payable without adjudication. The Court also observed that inspection-related proceedings under the GST framework should be taken to their logical conclusion expeditiously.

Conclusion: The excess amount, if any, is to be adjusted at the time of final adjudication or against any amount due in favour of the petitioner. The petition is partly allowed to that extent.

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