2026-VIL-842-BOM
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SGST High Court Cases

GST - Levy of Interest on self-assessed tax deposited in Electronic Cash Ledger - Recovery proceedings under Section 79 of CGST Act - Petitioner challenged garnishee notices issued for recovery of interest on self-assessed tax for financial years 2017-18 to 2021-22. The Petitioner submitted representations regarding interest computation contending that interest can be levied only up to the date of deposit in Electronic Cash Ledger. Without adjudicating the representations the Respondent initiated garnishee proceedings - Whether garnishee proceedings can be initiated for interest liability without prior adjudication under Sections 73 and 74 – HELD – The representations of the petitioner regarding computation of interest liability remain undecided and undisputed by the Respondent. There are conflicting judicial views on whether interest on self-assessed tax can be adjusted against amounts available in Electronic Cash Ledger and whether garnishee proceedings can proceed for balance interest. However, it is settled law that recovery proceedings under Section 79 of CGST Act can be initiated only after following due process of issuance of notice and confirmation of demand through adjudication - The Respondent shall decide the Petitioner's representations on their own merits in accordance with law by passing a reasoned order. Until such decision is taken the Respondent shall not take precipitative steps pursuant to the garnishee notices – The petition is disposed of
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