Recovery actions under the GST Act cannot commence without proper notice to the taxpayer and due process as mandated by the amended rules.

ORDER :

BHARGAV D. KARIA, J.

1. Heard learned advocate Mr.Ashutosh S. Dave for the petitioner and learned Assistant Government Pleader Ms.Shrunjal Shah for the respondent who appears on advance copy.

2. Issue Notice, returnable forthwith. Learned Assistant Government Pleader Ms.Shrujnal Shah waives service of notice for and on behalf of the respondent.

3. This petition is filed under Article 226 of the Constitution of India with the following prayers :

“A. Hold that the impugned advisory is arbitrary, illegal and are dehors to the provisions of the Central/Gujarat Goods and Services Tax Act, 2017 as also the Central/Gujarat GOODS AND SERVICES TAX RULES , 2017 and as a consequence thereof be pleased to quash and set-aside the advisory dated 18.12.2024 is issued by the Respondent to the Petitioner which is annexed at ANNEXURE A to the petition;

B. Pending the admission, hearing and final disposal of the petition, be pleased to stay the operation, implementation and execution of the impugned advisory dated 18.12.2024 issued by the Respondent as is annexed at ANNEXURE A to the petition.”

4. The brief facts of the case are as under:

4.1. The petitioner is a private limited company specialised in formulation of psychotropic range of Ayurvedic and herbal products as well as variety of antibiotics, enzymes and vitamins. The petitioner is registered under the provisions of the Central/ STATE GOODS AND SERVICES TAX ACT , 2017 (for short ‘the GST Act’) and is regularly filing its return of income from 01.07.2017 as per the provisions of Section 39 of the GST Act.

4.2. It is the case of the petitioner that the petitioner received an advisory dated 18.12.2024 for financial years 2017-18, 2018- 19, 2021-22, 2022-23 and 2023-24 for ensuring payment of interest under Section 50 (1) of the GST Act in respect of self-assessed tax paid after the due date of furnishing of returns.

4.3. It is the case of the petitioner that the advisory also provides that in case of failure to discharge interest liability or to submit sufficient clarification in respect of such liability, recovery action under Section 79 of the GST Act may be initiated by the respondent.

5.1. Learned advocate Mr.Ashutosh Dave for the petitioner submitted that the respondent- Authority could not have issued the advisory as per the provisions of Section 50 (1) of the GST Act which provides that if any person who is liable to pay self- assessment tax, then he will be liable to pay interest at the rate of 18% per annum or as may be recommended by the GST Council. It was submitted that without giving an opportunity of hearing and without considering the submissions of the petitioner, no recovery proceedings could have been contemplated by the respondent-Authority being the impugned advisory.

5.2. It was also pointed out that there is no provision for issuance of the advisory under Section 50 (1) of the GST Act and thereto, referring to the provisions of Section 79 of the GST Act to initiate the recovery proceedings.

5.3. It was submitted that on perusal of the advisory, it appears that it only refers to the provisions of Sections 50 and 75(12) of the GST Act read with Rule 88B of the Central/ STATE GOODS AND SERVICES TAX RULES (for short ‘the GST Rules’) which provides for manner of calculating interest on delayed payment of tax.

5.4. In support of his submissions, reliance was placed on the decision of the Hon’ble Jharkhand High Court in case of Mahadeo Construction Co. Versus Union of India reported in [2020] 116 taxmann.com 262 (Jharkhand) to submit that in the similar facts, Hon’ble Jharkhand High Court has held that without initiation of any adjudication proceedings, no recovery proceedings under Section 79 of the GST Act could be initiated for recovery of interest amount.

5.5. It was therefore submitted that the impugned advisory is liable to be quashed and set aside.

6.1. On the other hand, learned Assistant