Tax Authorities Wrongly Penalized Taxpayer for Timely GST Return Submission, Order Quashed Under Section 125

HC found that tax authorities erroneously imposed penalty under Section 125 of GST Act despite petitioner's timely submission of returns within prescribed notice period. The court set aside the penalty orders, ruling that the authorities failed to properly consider the submitted documentation and incorrectly concluded no response was received.

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Issues involved:
The issues involved in the judgment are imposition of penalty under Section 125 of the GST Act despite compliance with show cause notice and submission of returns within the stipulated time frame.

Summary:

The petitioner received a notice under Section 46 of the GST Act, directing them to furnish returns within 15 days, with the assurance that proceedings would be withdrawn upon compliance. The petitioner submitted the returns on 07.02.2023, meeting the requirements of the notice. However, the authorities proceeded to impose a penalty under Section 125 of the GST Act through an order dated 10.02.2023, despite the petitioner's timely response. The respondent's counsel did not contest these facts.

The impugned order noted that the petitioner had indeed replied on 07.02.2023. Nevertheless, the assessing authority, in the same order dated 10.02.2023, erroneously concluded that no reply had been received, indicating a lack of proper consideration of the available facts.

Given that the petitioner had adhered to the show cause notice by submitting the required returns, there was no valid basis for the imposition of a penalty. Consequently, the impugned orders dated 10.02.2023 and 14.03.2023 were deemed legally flawed and passed without due consideration.

In light of the above, the High Court ruled in favor of the petitioner, setting aside the impugned orders dated 10.02.2023 and 14.03.2023. The writ petition (tax) was allowed, providing relief to the petitioner.

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