Reopened assessment penalty under KGST Act upheld as applicable to prior years and not discriminatory under Article 14.

Section 17(5)(A) of the KGST Act was treated as applicable to reopened assessments completed under Section 17(4), where fresh assessment shows tax already paid to be less than the tax due. The provision was regarded as capable of operating even for assessment years before 1.4.1998 because the relevant taxable event was the reopening and revision of the assessment, not the date of the provision's introduction. The Court also held that assessees opting for Section 17(4) form a distinct class, as their assessments are based on their own returns and statements without the normal scrutiny process, and that the higher penalty is a permissible deterrent rather than hostile discrimination under Article 14.

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Issues: Whether penalty under Section 17(5)(A) of the KGST Act could be levied in respect of an assessment year prior to the provision's introduction, and whether the provision was arbitrary or discriminatory under Article 14 of the Constitution of India.

Analysis: Section 17(5)(A) was held to operate on reopened assessments completed under Section 17(4) and to apply where the tax already paid is found to be less than the tax due on fresh assessment. The provision was treated as capable of application even to assessment years preceding 1.4.1998 because the taxable event was the reopening and revision of the assessment, not the year of introduction of the provision. The Court also found that assessees who opt for assessment under Section 17(4) form a distinct class, since such assessments are completed on the basis of the assessees' own returns and statements without the usual scrutiny process under Sections 17(2) and 17(3). In that setting, a higher penalty under Section 17(5)(A) was held to be a permissible deterrent and not hostile discrimination.

Conclusion: The challenge to the levy of penalty failed, and the writ petition was dismissed.

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