Recovery proceedings under Section 87 of the Finance Act before adjudication of SCN is not permissible

Last updated: 22 July 2015

Court :
Karnataka High Court

Brief :
The Hon’ble High Court of Karnataka relying upon the decision in the case of GSP Infratech Development Ltd. Vs. Union of India and Others [2013-TIOL-399-HC-KAR-ST], held that the words "amount payable by a person" used in Section 87 of the Finance Act will have to be considered in the background of Section 73 of the Finance Act inasmuch as, SCN issued under Section 73(1) of the Finance Act is required to be adjudicated after considering representation of the person, if filed, and thereafter determining the amount payable under the Finance Act. Any deviation in this regard would be in violation of principles of natural justice and doctrine of Audi Alteram Partem would be attracted.

Citation :
Mrs. Prashanthi (Legal Heir and W/o. Late Sri P S Harsha, Proprietor of M/s Rapid Marine Suppliers) Vs. Union of India and Others [2015-TIOL-1596-HC-KAR-ST]