DRC 01 could not have been issued for the purpose of recovery of the amount towards interest on delayed payment of tax. The notice should have been issued in Form GST DRC 07.
Section 50 of the CGST Act, 2017— Interest — DRC 01 form– The applicant prayed for quashing Form GST DRC 01 issued to the petitioner; holding the interest on delayed payment of tax to be charged on gross liability is ultra vires. A Coordinate Bench of this Court on dated 5th December 2019 stayed the further proceedings pursuant to the impugned notice dated 19.07.2019. The court observed that after amendment in Section 50 of the Act, which proposed that the interest can only be levied on the net tax liability and not on the gross tax liability, the demand raised by the respondent is not in accordance with law. The court further observed that Form GST DRC 01 can be served along with the notice issued under sections 52, 73, 74, 76, 122, 123, 124 125, 127, 129 or 130 and that too, electronically as a summary of notice. There is no reference of any notice under Section 50 so far as Rule 142(1)(a) of the Rules is concerned. Therefore, DRC 01 could not have been issued for the purpose of recovery of the amount towards interest on delayed payment of tax. The court observed that the notice should have been issued in Form GST DRC 07.
Held that:- The Hon’ble High Court allowed the application and quashed the order issued in GST DRC 01.
DRC 01 could not have been issued for the purpose of recovery of the amount towards interest on delayed payment of tax. The notice should have been issued in Form GST DRC 07.
Section 50 of the CGST Act, 2017— Interest — DRC 01 form– The applicant prayed for quashing Form GST DRC 01 issued to the petitioner; holding the interest on delayed payment of tax to be charged on gross liability is ultra vires. A Coordinate Bench of this Court on dated 5th December 2019 stayed the further proceedings pursuant to the impugned notice dated 19.07.2019. The court observed that after amendment in Section 50 of the Act, which proposed that the interest can only be levied on the net tax liability and not on the gross tax liability, the demand raised by the respondent is not in accordance with law. The court further observed that Form GST DRC 01 can be served along with the notice issued under sections 52, 73, 74, 76, 122, 123, 124 125, 127, 129 or 130 and that too, electronically as a summary of notice. There is no reference of any notice under Section 50 so far as Rule 142(1)(a) of the Rules is concerned. Therefore, DRC 01 could not have been issued for the purpose of recovery of the amount towards interest on delayed payment of tax. The court observed that the notice should have been issued in Form GST DRC 07.
Held that:- The Hon’ble High Court allowed the application and quashed the order issued in GST DRC 01.