HC Quashes DRC-13 Recovery for Interest on Regularised IGST ITC

Case Details: Rivera Enterprises vs. Commercial Tax Officer (STO) [2025] 181 taxmann.com 216 (Madras)

Judiciary and Counsel Details

• C. Saravanan, J.
• K. Sureshkumar for the Petitioner.
• Mrs K. Vasanthamala, GA for the Respondent.

Facts of the Case

The petitioner, challenged the assessment and DRC-13 recovery for interest on belated IGST input tax credit (ITC). It was submitted that the proceedings had initially commenced through GST ASMT-10, invoking Section 16(4) of the CGST Act, for reversal of ITC, and that the non-reversal of such ITC had resulted in the issuance of DRC-01 and the subsequent impugned order. It was contended that an earlier writ had regularised the belated availment of ITC. Any recovery of interest under DRC-13 predicated on the premise that the ITC had not been regularised was arbitrary and lacked justification. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the belated IGST ITC had already been regularised by the prior writ order and, therefore, the impugned assessment and DRC-13 recovery of interest on such ITC was arbitrary. The Court noted that the amount specified in the impugned order corresponded to the ASMT-10 figure. It was further observed that the authorities were required to reconsider the recovery in the light of the earlier writ order, ensuring that no interest is levied on ITC that has been regularised. The Court quashed the DRC-13 recovery of interest and remanded the matter for fresh consideration, in accordance with Sections 16, 50, and 79 of the CGST Act.

List of Cases Reviewed

• Rivera Enterprises v. Deputy State Tax Officer, Chengalpattu [WP. No.16289 of 2025, dated 2.7.2025] (para 7) followed

List of Cases Referred to

• Rivera Enterprises v. Deputy State Tax Officer, Chengalpattu [WP. No.16289 of 2025, dated 2.7.2025] (para 3)
• Seeniselvam v. Regional Passport Officer [W. P. (MD) No. 25081 of 2024, dated 17-10-2024] (para 4).