Interest Recovery Invalid Without Form GST DRC-01D Intimation | HC

Case Details: Bombay Art vs. Union of India - [2025] 179 taxmann.com 494 (Gujarat)

Judiciary and Counsel Details

• Bhargav D. Karia & Pranav Trivedi, JJ.
• Hardik V. Vora, Adv. for the Petitioner.
• Siddharth H. Dave & Utkarsh R. Sharma, Advs. for the Respondent.

Facts of the Case

The petitioner, a Hindu Undivided Family, received an intimation regarding short payment of interest on delayed payment of tax arising from its filed returns. Thereafter, the jurisdictional officer placed a lien on the petitioner’s account. Following the attachment, a portion of the amount under protest was deposited. It was contended that recovery proceedings required prior compliance, including issuance of intimation in Form GST DRC-01D and provision of an opportunity to submit a reply and to be heard, which had not been followed. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the recovery initiated by the jurisdictional officer was contrary to the statutory procedure governing recovery of interest under the CGST Act and the Gujarat GST Act. The Court observed that, in terms of Rule 88C read with Rule 142B, issuance of Form GST DRC-01D and granting an opportunity to respond are mandatory prerequisites before invoking Section 79. The Court accordingly quashed the impugned DRC-13 attachment and directed the jurisdictional officer to initiate proceedings afresh strictly in accordance with law, including issuance of Form GST DRC-01D and provision of reply and hearing opportunities.

List of Cases Reviewed

• Rajkamal Builder Infrastructure (P.) Ltd. v. Union of India [2021] 127 taxmann.com 150/88 GST 716/50 GSTL 153 (Gujarat)
• In case of Reliance Formulation (P.) Ltd. v. Assistant Commissioner of State Tax [2025] 176 taxmann.com 608 (Gujarat) (Para 10) followed

List of Cases Referred to

• Reliance Formulation (P.) Ltd. v. Asstt. Commissioner of State Tax [2025] 176 taxmann.com 608 (Gujarat) (para 9)
• Rajkamal Builder Infrastructure (P.) Ltd. v. Union of India [2021] 127 taxmann.com 150/88 GST 716/50 GSTL 153 (Gujarat) (para 10)
• Mahadeo Construction Co. v. Union of India [2020] 116 taxmann.com 262/81 GST 271/36 GSTL 343 (Jharkhand) (para 16).