2026-VIL-666-TEL
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SGST High Court Cases

GST – Recovery proceedings – Applicability of explanation to Section 75(12) of the CGST Act, 2017– Procedural compliance under Rule 88C of the CGST Rules, 2017 – Issue of garnishee notice in respect of discrepancy between details of outward supplies and Annual return - Petitioner challenges the notice on the ground that it does not precede any adjudication proceedings, while the respondent contends that under Section 75(12) of the Act, recovery proceedings can be undertaken in cases of self-assessed tax without adjudication - Whether recovery proceedings under Section 79 can be initiated directly without compliance with the mandatory procedure prescribed under Rule 88C of the Rules, which requires issuance of an intimation in the prescribed Form GST DRC-01B giving the registered person an opportunity to furnish explanation for the discrepancy – HELD - Although the explanation added to Section 75(12) of the CGST Act w.e.f. 01.01.2022, clarifies that self-assessed tax includes tax payable in respect of outward supplies furnished under Section 37 but not included in the return under Section 39, and does not impose any additional liability beyond what the petitioner would have been otherwise liable for, the recovery proceedings must strictly comply with the procedural requirements prescribed under Rule 88C - The Rule 88C mandates that before recovery action under Section 79 is initiated, the proper officer must issue an intimation in the prescribed Form GST DRC-01B, highlighting the difference and directing the person to either pay the differential tax liability with interest or furnish explanation within seven days. Only where the amount remains unpaid within the specified period and no explanation is furnished or where the explanation is found unacceptable by the proper officer, recovery proceedings under Section 79 can be initiated - In the present case, the prescribed procedure under Rule 88C was not followed, depriving the petitioner of the opportunity to furnish an explanation in the prescribed form before recovery action was taken - The impugned garnishee notice is set aside with the direction that the proper officer shall issue the intimation under Rule 88C, consider any explanation furnished by the petitioner, and only thereafter proceed with recovery action if warranted – The writ petition is allowed
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