2023 (11) TMI 93 - HC - GST

Timely Tax Payment Not Enough: GST Penalty Upheld for Delayed Remittance of Collected Tax Under Sections 73(8) and 73(11)

M/s. Global Plasto Wares Versus Assistant State Tax Officer, Thrissur, The State Tax Officer, The Joint Commissioner, Thrissur,

HC upheld penalty imposed under GST Act for failure to remit collected tax within 30 days, despite tax being paid within notice period. The court ... Restriction on Benefit of reduction / Nil rate of penalty - Applicability of Section 73(11) or 73(8) - assessee had paid the tax within thirty days from the issue of notice along with interest - Amount of GST was collected from the others - HELD THAT:- Considering the provisions of Sub-sections 6, 8 and 9 of Section 73 of the GST Act, 2017 it is provided that if a person chargeable to tax fails to deposit the tax collected by him within a period of thirty days from the due date of the payment of the such tax, Sub-section 8 will not have any effect and such a person is liable to pay penalty. The Assessing Authority has taken the correct view in the matter and, therefore, there are no error of law which requires interference by this Court - petition dismissed. Issues:The issue involves the interpretation of Sections 73(8) and 73(11) of the GST Act, 2017 regarding the liability for penalty when tax is paid within thirty days of notice but not deposited to the Government within the same period.Summary:The petitioner challenged the order dated 14.09.2023, focusing on the penalty of Rs. 40,000 imposed. The petitioner contended that tax was paid within thirty days of notice issuance, relying on Section 73(8) of the GST Act, 2017. Conversely, the Government Pleader argued that Section 73(11) applies when tax collected is not remitted to the Government within thirty days, attracting penalty under Section 73(9). The Assessing Authority held that penalty was due as tax collected was not paid within the stipulated period.The controversy centered on whether an assessee, who paid tax within thirty days of notice along with interest but failed to remit collected tax to the Government within the same timeframe, should be liable for penalty. The Assessing Authority concluded that penalty was applicable under Section 73(9) and Section 73(11) of the CGST/KSGST Act, 2017, as tax collected was not paid within thirty days of the due date.Sections 73(6), 73(8), and 73(9) of the GST Act, 2017 outline the consequences for failing to deposit collected tax within thirty days of the due date. It is emphasized that if a person chargeable to tax does not deposit the tax within the specified period, Section 73(8) would not absolve them from penalty liability.After considering the provisions of Sections 73(6), 73(8), and 73(9) of the GST Act, 2017, it was determined that failure to deposit tax collected within thirty days attracts penalty, as per Section 73(11). The Court upheld the Assessing Authority's decision, finding no legal error warranting intervention. Consequently, the writ petition was dismissed.