Saha Hospitality Ltd VS The State of Maharashtra

The petitioner has filed a writ petition challenging the orders dated 17th February 2020 and 19th June 2020 issued by Respondent No.2, the Deputy Commissioner of State Tax, D.C. E-634, L.T.U.-3. The petitioner claims that these orders seek to directly recover interest under Section 50 of the GST Act through the coercive recovery provisions of Section 79. This, according to the petitioner, is in clear contravention of Section 78 of the GST Act, which stipulates a three-month breathing period after the passing of any order before initiating recovery actions.

The Petitioner has filed a Writ Petition challenging the orders dated 17th February 2020 and 19th June 2020, issued by Respondent No. 2 – The Deputy Commissioner of State Tax, D.C. E-634, L.T.U.-3 (impugned orders). According to the Petitioner, these orders seek to directly recover interest under Section 50 of the GST Act through coercive recovery provisions of Section 79, which is in clear contravention of Section 78 of the GST Act. Section 78 provides for a three-month breathing period after the passing of any order before any recovery action can be initiated.

The Petitioner contends that the impugned orders were passed without issuing any show-cause notice and without giving a hearing to the Petitioner. Additionally, the Petitioner claims to be unaware of the basis on which the interest calculation has been made.

Furthermore, the Petitioner asserts that Respondent No. 2 is threatening to initiate coercive recovery proceedings under Section 79 of the GST Act if the amount is not paid within a period of seven days.

The petitioner in this case is contesting two orders issued by the Deputy Commissioner of State Tax. They argue that the orders, issued on February 17, 2020, and June 19, 2020, violate Section 78 of the GST Act, which mandates a three-month grace period after any order is passed. The petitioner alleges that the respondent, without issuing a show cause notice or providing a hearing, is attempting to recover interest directly under Section 50 of the GST Act through coercive measures outlined in Section 79.

Moreover, the petitioner claims ignorance regarding how the interest calculation was determined. They further assert that the respondent is threatening coercive recovery proceedings if the amount is not paid within seven days. In response, the respondent denies the petitioner’s conclusions, stating that the emails sent on the mentioned dates were merely notifications of interest payment under Section 50 of the CGST Act / MGST Act, 2017, due to late filing of Return-GSTR 3B since July 2017. They affirm their commitment to follow due process and initiate recovery proceedings only after issuing a show cause notice.

The petitioner has filed a writ petition challenging two orders issued by the Deputy Commissioner of State Tax, which they argue seek to recover interest under Section 50 of the GST Act directly through coercive recovery provisions of Section 79. This, according to the petitioner, violates Section 78 of the GST Act, which mandates a three-month grace period after an order is passed. They also contend that these orders were issued without a show cause notice or a hearing, and they are unclear about how the interest calculation was made. Furthermore, they claim that the respondent is threatening coercive recovery proceedings if the amount is not paid within seven days.

In response, the respondent filed an affidavit denying the petitioner’s conclusions. They argue that the emails sent to the petitioner were merely notifications of interest payment under Section 50 of the CGST Act/MGST Act, 2017, due to late filing of returns. They assert their compliance with the procedural requirements and state their intention to initiate recovery proceedings following the provisions of the law, denying any intention to directly recover interest under Section 50 of the CGST/MGST Act.

The petitioner has challenged the orders issued by the Deputy Commissioner of State Tax, alleging that they directly seek to recover interest under Section 50 of the GST Act through coercive measures, in violation of Section 78 which mandates a three-month period before such recovery. The petitioner claims that the orders were issued without issuing a show cause notice or providing a hearing, and they are unclear about how the interest calculation was made.

Respondent No.2 contends that the orders were merely an intimation of payment of interest due to late filing of returns, and they deny any intention to directly recover interest under Section 50. In response to this statement, the petitioner’s advocate decides not to press for the reliefs sought in the writ petition, leading to its disposal.

The court orders will be digitally signed and can be acted upon upon receipt of a digitally signed copy via fax or email.

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