Interest under 50

[Veeresham Veerabomma]

Recently the department is issuing DRC 07 notices for recovery of interest on account of belated filing monthly returns of 3B. Now the moot question is whether without issuance of any show cause notice can the revenue straight away issue the said notice / Order DRC 07 ? Direct recovery of interest on unpaid self-assessed tax is gross violation of natural justice and runs contrary to settled jurisprudence. Can it be challenged under Article 226 ? Based on the judgments in case of Mahadeo Constructions, Godavari Commodities, Narsing Ispat, R.K. Transport Pvt Ltd, Daejung Moparts Pvt Ltd and L.C. Infra Projects interest is automatic but recovery is not. I invite the valuable suggestions across this forum at large. The action of the revenue is right or unconstitutional ?

AI Summary

Tax Department's DRC 07 Notices for GST Interest Recovery Spark Debate on Natural Justice and Article 226 A discussion in a forum addresses the issuance of DRC 07 notices by the tax department for recovering interest due to late filing of GST returns without prior show cause notices. Participants debate whether this action violates principles of natural justice, suggesting it could be challenged under Article 226. They reference legal precedents indicating that while interest is automatic, recovery requires due process. Some argue that the department can issue recovery notices under Section 75(12) without a show cause notice, while others emphasize the need for an opportunity to be heard. Suggestions include filing an appeal or considering the constitutional validity of the section.