Gujarat High Court
Bombay Art vs Union Of India on 10 October, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/16855/2024 JUDGMENT DATED: 10/10/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 16855 of 2024
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
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Approved for Reporting Yes No
✔
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BOMBAY ART
Versus
UNION OF INDIA & ORS.
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Appearance:
MR. HARDIK V VORA(7123) for the Petitioner(s) No. 1
MR SIDDHARTH H DAVE(5306) for the Respondent(s) No. 1,2
MR UTKARSH R SHARMA(6157) for the Respondent(s) No. 3,4
NOTICE SERVED for the Respondent(s) No. 1,2
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 10/10/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI)
1. Heard learned advocate Mr. Hardik Vora
appearing for the petitioner and learned
Assistant Government Pleader Mr. Utkarsh
Sharma for the respondent Nos. 3 and 4.
2. Rule returnable forthwith. Learned Assistant
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Government Pleader Mr. Utkarsh Sharma waives
service of notice of Rule for the respondents.
3. Having regard to the controversy in narrow
compass, this matter is taken up for hearing with
the consent of learned advocates for both the
parties.
4. This petition is filed under Article 226
of the Constitution of India with following
prayers:
a. A writ of certiorari, or any other
appropriate writ, order and/or directions in
the nature of certiorari to quash the notice
dated 27.03.2023 and all the subsequent
notices issued by the respondent no. 3
determining the demand of Rs. 28,16,834/- on
account of short payment of interest on
delayed payment of tax u/s 50 of the CGST Act
r.w.s. GGST Act by invoking provisions u/s
75(12) of CGST Act r.w.s. GGST Act and
without initiating assessment proceedings.
(Annexure A);
b. A writ of mandamus, or any other
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appropriate writ, order and/or directions in
the nature of mandamus to quash the notice
dated 20.05.2024 issued in Form GST DRC-13
u/s 79(1)(c) to hold lien the amount of Rs.
23,17,702/- in bank account no.
50200005197811 maintained with HDFC Bank,
account no. 18330200000287 maintained with
Bank of Baroda and account no.
111010200016773 maintained with Axis Bank and
directing the Respondent to release the bank
accounts. (Annexure B).
c. A writ of Mandamus or writ, order, or
direction in the nature of Mandamus directing
the respondent to refund the amount of
interest of Rs. 7,50,000/- which was paid
under pressure.
d. A writ of mandamus, or any other
appropriate writ, order and/or directions in
the nature of mandamus to strike down and
declare sub-section (12) section 75 of CGST
Act and GGST Act as ultra vires, illegal,
discriminatory, arbitrary and in principles
of natural justice;
e. Pending the admission, hearing and final
disposal of this petitio stay the notice
dated 20.05.2024 and/ or direct the
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respondent to release the attachment over the
bank accounts;
f. Pass any other order(s) as this Hon'ble
Court may deem fit and more appropriate in
order to grant interim relief to the
Petitioner;
g. Any other and further relief deemed just
and proper be granted in g. the interest of
justice;"
5. Brief facts of the case are as under:
5.1 The petitioner is a Hindu Undivided Family
Firm registered under the provisions of
Gujarat Goods and Service Tax Act,2017
(hereinafter referred to as 'the Act' for
short) with effect from 1.7.2017, having
registration No. 24AABHS0396A1ZK.
5.2 Notice dated 24.3.2023 was issued to the
petitioner with regard to the short payment of
interest on delayed payment of tax pursuant to
filing of return. The Superintendent, Central
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GST and Central Excise,(hereinafter referred
to as 'the respondent' for short) issued
Notice to pay differential interest on late
payment of GST on delayed filing of return.
Thereafter reminder letters were issued by the
respondent on 24.4.2023, 22.5.2023 and
31.5.2023 invoking the provisions of Section
75(12) of the Act, directing the petitioner to
make payment of Rs.28,16,834/- on account of
short payment of interest on delayed payment,
failing which, recovery proceedings shall be
initiated under Section 79 without any
assessment proceedings.
5.3 Pursuant to the reminders sent by the
petitioner, the respondent issued notice in
Form DRC-13 to the Branch Manager of the Bank
of the petitioner directing them to hold lien
to the amount of Rs.23,17,702/- with regard to
the Accounts maintained by the petitioner.
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Subsequent to such stand taken by the
respondent, the petitioner made payment of
Rs.7,50,000/- under protest towards the demand
made by the respondent.
6. Learned advocate Mr. Hardik Vora for the
petitioner submitted that the respondent-
Authority could not have issued the advisory
as per the provisions of Section 50(1) of the
GST Act which provides that if any person who
is liable to pay self- assessment tax, then he
will be liable to pay interest at the rate of
18% per annum or as may be recommended by the
GST Council. It was submitted that without
giving an opportunity of hearing and without
considering the submissions of the petitioner,
no recovery proceedings could have been
contemplated by the respondent-Authority being
the impugned advisory.
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6.1 It was also pointed out that there is no
provision for issuance of the advisory under
Section 50(1) of the GST Act and thereto,
referring to the provisions of Section 79 of
the GST Act to initiate the recovery
proceedings.
6.2 It was submitted that on perusal of the
advisory, it appears that it only refers to
the provisions of Sections 50 and 75(12) of
the GST Act read with Rule 88B of the
Central/State Goods and Services Tax Rules
(for short 'the GST Rules') which provides for
manner of calculating interest on delayed
payment of tax.
7. On the other hand, learned Assistant
Government Pleader Mr. Utkarsh Sharma for the
respondent submitted that the issuance of the
advisory for ensuring payment of interest
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under Section 50(1) of the GST Act is only to
intimate the petitioner with regard to the
outstanding interest liability as per the
provisions of Section 50(1) of the GST Act
which provides for interest on delayed
payment.
7.1 It was submitted that as per Section
75(12) of the GST Act, where any amount of
self-assessed tax in accordance with the
return furnished under Section 39 of the GST
Act remains unpaid either wholly or partly or
any amount of interest payable on such tax
remains unpaid notwithstanding anything
contained in Sections 73 and 74 of the GST
Act, the same is to be recovered under the
provisions of Section 79 of the GST Act.
7.2 It was further submitted that the newly
inserted Rule 142B of the GST Rules with
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effect from 04.08.2023 provides to issue the
intimation for certain amounts liable to be
recovered under Section 79 of the GST Act and
therefore, without issuance of intimation in
Form GST DRC-01D, as referred to in the said
Rule, no recovery as contemplated in Section
79(1) of the GST Act can be made by the
respondent-Authorities and therefore, merely
issuance of advisory by the respondent-
Authority after 04.08.2023 would not result
into taking any action of recovery as per the
mode prescribed in Section 79(1) of the GST
Act without issuing the intimation as per Rule
142B of the GST Rules.
7.3 It was submitted that as per Sub-rule (2)
of Rule 142B of the GST Rules, the intimation
referred to in Form GST DRC-01D is to be
treated as a notice for recovery. It was
therefore submitted that the petitioner will
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have an opportunity to file a reply to such
notice for recovery and after considering the
reply only, the respondent-Authority have to
apply the mode of recovery prescribed under
Section 79(1) of the GST Act.
7.4 It was therefore submitted that the
impugned advisory issued by the respondent-
Authority is only to put the petitioner on
guard with regard to the proposed recovery
proceedings for outstanding liability of
payment of interest as computed by the
respondent-Authority under Rules 88B and 88C
of the GST Rules.
8. Per contra, learned advocate Mr. Utkarsh
Sharma relying on the affidavit-in-reply has
submitted that Section 75(12) of the Act
clearly demonstrate about the recovery
proceedings wherein Sections 73 and 74 of the
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Act is not involved and where the tax has not
been paid or short-paid or erroneously
refunded or where ITC has been wrongly availed
or utilised. In the instant matter, there is a
disputed matter of recovery of interest only
for which proper Officer has to take action
against the tax payer as per Section 75(12) of
the Act. In view of the provision of Section
75(12) of the Act read with Section 79 of the
Act, the proceedings were initiated by the
department without issuing show-cause notice
under Sections 73 and 74 of the Act. The
proceedings were initiated for the recovery of
interest which were not paid by the tax payers
even after issuance of multiple letters dated
24.3.2023, 24.4.2023, 22.5.2023 and 31.5.2023.
The Office had clearly mentioned that further
proceedings as per Section 75/79 of the Act
shall be carried out by the department.
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Therefore, issuance of show-cause notice is
not necessitated at the instance of the
department. The department has given
sufficient opportunities to the tax payers to
file its reply before the department and has
followed the criteria of principles of natural
justice. Therefore, in view of the above
provisions, the department has rightly invoked
the provisions of Section 75(12) of the Act
read with Section 79 of the Act and,
therefore, the petition is misconceived.
9. In case of Reliance Formulation Private
Ltd. v. Assistant Commissioner of State Tax,
Ghatak 21, Division 2 passed in SCA No. 5453
of 2025, it has been held by this Court as
under:
"11. On perusal of the above Form GST
DRC-01D, it is clear that the petitioner
is put to notice to pay the outstanding
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interest amount as per Section 75(12) of
the GST Act within seven days, failing
which, the proceedings to be initiated to
recover the outstanding dues which may
include the outstanding interest as per
the provisions of Section 79 of the GST
Act which provides for recovery of the
dues as per the modes prescribed therein.
Therefore, the reference to Section 79 of
the GST Act in the impugned advisory is
only to put the petitioner on guard as to
such outstanding liability as per the
record of the respondent-Authority so
that the petitioner can either make the
payment of such liability if agreed or
may oppose the same when the notice in
Form GST DRC-01D is received by the
petitioner for recovery of such amount as
stated hereinabove. Therefore the anxiety
of the petitioner that the respondent-
Authority will directly apply the mode of
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recovery prescribed under Section 79(1)
of the GST Act, is without any basis in
view of the insertion of Rule 142B in the
GST Rules with effect from 04.08.2023
which requires intimation/notice of
recovery to the petitioner so as to
enable the petitioner to reply the same."
10. Having heard learned advocates for the
respective parties and perused the material on
record, the controversy involved in the
present petition is no more res-integra in
view of decision in case of Rajkamal Builder
Infrastructure (P) Ltd. Vs. Union of India,
(Gujarat) and in case of Reliance Formulation
Private Ltd. v. Assistant Commissioner of
State Tax (Supra).
12. On perusal of the above dictum of law and
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provisions and the Rules, it appears that as
per the provisions of Section 39(7) of the GST
Act, the petitioner is required to file the
return of income by self-assessment and if the
petitioner does not pay the interest as per
the self- assessment procedure prescribed
under Section 39 of the GST Act, the
petitioner is liable to pay the interest as
provided under Section 50(1) of the GST Act
which provides that any person who is liable
to pay tax interest in accordance with the
provisions of the GST Act and Rules but fails
to pay the tax or any part thereof, then such
person is liable to pay the interest on his
own at the rate of 18% per annum as may be
recommended by the GST Council.
13. The manner in which the interest is to be
computed is provided under Rule 88B of the GST
Rules for delayed payment of tax, whereas,
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Section 75(12) of the GST Act provides that
notwithstanding anything contained in Sections
73 or 74 of the GST Act, where any amount of
self-assessed tax or interest payable on such
tax remains unpaid, then the same shall be
recovered under the provisions of Section 79
of the GST Act. At the same time, Rule 88C of
the GST Rules provides the manner of dealing
with difference in liability reported in
statement of outward supplies and that
reported in return, whereas, Rule 142B of the
GST Rules which is inserted by the Central
Goods and Services Tax (with an Amendment)
Rules, 2023 with effect from 04.08.2023
provides for intimation of certain amounts
liable to be recovered under Section 79 of the
GST Act which includes the tax or interest
which has become recoverable in accordance
with Section 75 of the GST Act read with Rule
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88C of the GST Rules or otherwise. Therefore,
on conjoint reading of the Scheme of the GST
Act and the Rules, it appears that the
respondent-Authority can recover the amount of
interest which has become due as per the
provisions of Section 50(1) of the GST Act
read with Rules 88B and 88C of the GST Rules
under Section 79(1) of the GST Act only after
issuance of intimation in Form GST DRC-01D
which will be treated as notice for the
recovery as provided under Rule 142B of the
GST Rules and without following such
procedure, the respondent-Authority cannot
make any effective recovery of interest which
may become payable by the assessee under the
provisions of the GST Act and Rules on self-
assessment to be made by such assessee.
14. In such circumstances, it would be germane
to refer to the Form GST DRC-01D as prescribed
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under Rule 142B of the GST Rules, which is
reproduces hereunder:
"FORM GST DRC-01D
[See rule 142B]
Intimation for amount recoverable under section 79
Reference No.- Date-
1. Details of intimation:
(a) Financial year:
(b) Tax period: Form.......To......
2. Section(s) of the Act or rule(s) under which
intimation is issued: <Drop down or check box for
section 75(12) r/w 79 may be provided>
3. Details of tax, interest or any amount payable:
(Amount in Rs.)
Tax Period Act POS Tax Interest Penalty Fee Others Total
(Place
of
Supply)
From To
1 2 3 4 5 6 7 8 9 10
Total
You are hereby directed to make the payment within
seven days failing which proceedings shall be
initiated against you to recover the outstanding dues
as per the provision of section 79 of the Act.
Signature:..................
Name:...............
Designation:............
Jurisdiction:.....................
Address:...............
To,
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GSTIN/ID
Name
Address
Note -
1.Only applicable fields may be filled up."
15. On perusal of the above Form GST DRC-01D,
it is clear that the petitioner is put to
notice to pay the outstanding interest amount
as per Section 75(12) of the GST Act within
seven days, failing which, the proceedings to
be initiated to recover the outstanding dues
which may include the outstanding interest as
per the provisions of Section 79 of the GST
Act which provides for recovery of the dues as
per the modes prescribed therein. Therefore,
the reference to Section 79 of the GST Act in
the impugned advisory is only to put the
petitioner on guard as to such outstanding
liability as per the record of the respondent-
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Authority so that the petitioner can either
make the payment of such liability if agreed
or may oppose the same when the notice in Form
GST DRC-01D is received by the petitioner for
recovery of such amount as stated hereinabove.
Therefore the anxiety of the petitioner that
the respondent-Authority will directly apply
the mode of recovery prescribed under Section
79(1) of the GST Act, is without any basis in
view of the insertion of Rule 142B in the GST
Rules with effect from 04.08.2023 which
requires intimation/notice of recovery to the
petitioner so as to enable the petitioner to
reply the same.
16. We also clarify that after issuance of the
notice in Form GST DRC-01D, as per the
provisions of Section 75(4) of the GST Act,
the respondent-Authority is bound to provide
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an opportunity to file reply as well as an
opportunity of hearing, if requested by the
assessee in compliance of the principles of
natural justice. Reliance placed by learned
advocate Mr. Ashutosh Dave on the decision of
Mahadeo Construction Co. Versus Union of India
(Jharkhand) would not have bearing inasmuch as
it was rendered prior to amendment and
insertion of Rule 142B of the GST Rules and
Form DRC-01D. On conjoint reading of Scheme of
the Act and the Rules, the Authority can
proceed in the manner referred hereinabove.
17. In view of the above, no interference is
required to be made at the stage of issuance
of advisory by the respondent-Authority as the
same is subject to further proceedings as
contemplated in Rule 142B of the GST Rules
read with Section 79 of the GST Act.
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18. In view of the same, it has been
categorically accepted that the respondent
authority can recover the amount of interest
which has become due as per the provisions of
Section 50(1) of the Act read with Rule 88(B)
and 80(C) of the GST Rules under Section 79(1)
of the Act only after issuance of intimation
in Form GST DRC-01D. Once the relevant Form
GST DRC-01D is issued by the department, it
will be treated as notice for recovery as
provided under Rule 142B of the GST Rules.
Without following the procedure of issuance of
Rule 142B of the GST Rules, the respondent
authority cannot make any effective recovery
of interest.
19. Therefore, on the basis of such
observation the impugned notice dated
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20.5.2024 is quashed and set-aside with a
direction that the department can initiate
proceedings by adopting proper procedure with
issuance of notice in Form GST DRC 01D.
However, the same would be subject to
providing opportunity to file reply as well as
opportunity of hearing.
In view of the above observations, the
present petition is allowed to the aforesaid
context. Rule is made absolute.
(BHARGAV D. KARIA, J)
(PRANAV TRIVEDI,J)
SAJ GEORGE
