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GST Interest Recovery and Attachment of Bank Account can’t be done without Notice

  • Jun 2, 2020 | Divita S Gupta

In a judgement passed by the Karnataka High Court, it was held that a show-cause notice is a prerequisite condition for quantification of interest or attachment of bank account without which the proceedings would be null and void. The respondent-assessee contended that no notice as contemplated under Section 73 of the GST Act was issued to the respondent-assessee before quantifying interest amount and attaching Bank account of the respondent-assessee.

After hearing the petition, the High Court of Karnataka held that issuance of a Show Cause Notice is the sine qua non to proceed with the recovery of interest payable under Section 50 of the GST Act and penalty leviable under the provisions of the GST Act and the Rules. It also held that interest payable under Section 50 of the GST Act had been determined by the respondent Authority without issuing a Show Cause Notice which is in breach of the principles of natural justice, and therefore the orders issued by GST authorities stand quashed.

Avalara helps businesses of all sizes get GST return filing, e-way bill generation and e-invoicing right with cloud-based GST compliance solutions in India. Goods and Services Tax (GST) rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Divita S Gupta
Avalara Author Divita S Gupta
Divita has served as a writer and editor for top financial services organizations in India. She has written on topics like mutual funds, insurance, taxes, SME financing for globally recognized banking and financial organizations including ICICI, Aditya Birla Group, News Corp. With a Masters in Business Administration from Symbiosis International University, she currently owns a small business in Mumbai.

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