GST recovery of self-assessed tax and interest upheld despite notice under Section 74, with matter remitted for reconsideration

Unpaid self-assessed GST and interest on belated payment may be recovered under the GST recovery machinery, and a notice referring to Section 74 does not by itself invalidate the proceedings. Reading Sections 73 and 74 with Sections 75(12), 79 and 50(1), the Court held the recovery action for delayed tax payment was maintainable. It nevertheless remitted the matter for reconsideration and a fresh order, giving the petitioner a further opportunity to have the reply examined in light of its industrial circumstances.

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Issues: (i) Whether the proceedings initiated under Section 74 of the respective GST enactments and the consequential recovery of interest on belated payment of tax were maintainable. (ii) Whether the matter should be remitted for fresh consideration.

Issue (i): Whether the proceedings initiated under Section 74 of the respective GST enactments and the consequential recovery of interest on belated payment of tax were maintainable.

Analysis: The dispute related to tax for the 2017-2018 period, which was paid only after departmental intimation. The Court relied on the combined scheme of Sections 73 and 74, together with Sections 75(12) and 79, and held that unpaid self-assessed tax and interest could be recovered under the GST mechanism. It also noted that interest under Section 50(1) was payable on belated tax payment, and that the mere reference to Section 74 in the summary proceedings did not invalidate the recovery action.

Conclusion: The challenge to the invocation of Section 74 and to the consequential recovery proceedings was rejected and the proceedings were held to be maintainable.

Issue (ii): Whether the matter should be remitted for fresh consideration.

Analysis: Although the recovery action was upheld, the Court took note of the petitioner's industrial nature and considered it appropriate to afford one further opportunity to have the reply reconsidered.

Conclusion: The matter was remitted to the respondent for reconsideration and fresh order.

Final Conclusion: The legality of the GST recovery proceedings was upheld, but the impugned matter was sent back for fresh adjudication on the petitioner's reply.

Ratio Decidendi: Unpaid self-assessed tax and the interest payable thereon may be recovered under the GST recovery provisions notwithstanding the form of the notice, and a remand may still be ordered for fresh consideration in an appropriate case.

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