Allahabad HC warns GST authorities in using pressure tactics by issuing letters

Allahabad High Court warns GST authorities using pressure tactics by issuing advisory letters

In a recent judgment, Hon’ble Allahabad High Court has warned the GST authorities using pressure tactics by issuing advisory letters and quashed the letter issued advising petitioner to make voluntary payments without issuing any show cause notice or demand.

ABCAUS Case Law Citation:
4250 (2024) (09) abcaus.in HC

In the instant case the assessee has filed a Writ Petition against a letter issued by the Superintendent of Central Goods and Service Tax (GST) advising the assessee to make voluntary payments of tax.

The Hon’ble High Court observed that the letter was titled as “Enquiry related to short payment of tax under RCM”. The letter referring to the inspection proceeding carried out by the officers of Anti Evasion branch of CGST, alleged that the assessee was liable to pay GST amounting to Rs. 5.23 crores.

The letter advised the assessee that in order to avoid any penal action and increasing interest liability, to make voluntary payment of remaining tax liability along with applicable interest as per section 50 of CGST Act 2017 at the earliest possible date.

The Hon’ble High Court observed that from a perusal of the said letter, it appeard that the Department was advising the petitioner to make voluntary payments without issuing any show cause notice/demand notice/recovery notice against the petitioner. The entire procedure is unknown in law.

When asked for clarification, the respondent Department was not able to indicate any provision under which such a letter could be issued by the authorities.

Accordingly, the impugned letter was quashed and set-aside with a direction upon the authorities to be cautious in future and not issue such letters that tantamount to pressure tactics by the Department.

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