GST Update on landmark decision that interest cannot be recovered without adjudication proceedings

Last updated: 04 May 2020

Court :
Jharkhand High Court

Brief :
The delay in retrospective amendment regarding computation of interest liability under GST regime has led to flood of writ petitions in High Courts seeking relief from recovery proceedings initiated by the government. The revenue authorities have consistently held that interest liability gets automatically attracted as soon as there is delay in payment of taxes on part of the assessee and the revenue authorities can recover the interest amount without following the adjudication procedure prescribed in law. The present update seeks to discuss the landmark decision given by the Hon’ble Jharkhand High Court in the case of MAHADEO CONSTRUCTION CO. VERSUS UNION OF INDIA wherein the issue involved was whether recovery proceedings under section 79 of the CGST Act, 2017 can be initiated without initiation and completion of adjudication proceedings under the Act?

Citation :
MAHADEO CONSTRUCTION CO. VERSUS UNION OF INDIA