2025 (2) TMI 1000 - HC - GST

High Court Validates Tax Notice for Late Annual Returns, Imposes Late Fees While Striking Down General Penalty Under Section 125

Tvl. Jainsons Castors & Industrial Products, Rep. by its Authorized Representatives, K.V. Srinivasamurthy Versus The Assistant Commissioner (ST), Chennai

HC upheld the validity of a notice under Section 47 r/w 73 of TNGST Act, 2017 for late filing of annual returns. The court confirmed the imposition of ... Levy of penalty in the form of late fee Violation of principles of natural justice - no notice was issued before issuing the show cause notice - Seeking to call for the records of the respondent in Form GST DRC-07 - HELD THAT:- In the present case, as per Section 44 of the Act, there was delay in filing the annual return by the petitioner. In the event of delay in filing the annual return, late fee would be levied under Section 47(2) of the Act - A reading of the Section 47(2) of the Act, it is clear that any registered person, who fails to furnish the return required under section 44 by the due date shall be liable to pay a late fee of one hundred rupees for every day during which such failure continues subject to a maximum of an amount calculated at a quarter per cent of his turnover in the State. In the event of non-filing of the return, the respondent can call upon the petitioner to pay the late fee in terms of Section 47 of the Act, which is independent provision deals with any default or belated filing of return. Therefore, this Court does not find any fault in the show cause notice issued by respondent under Section 47 r/w 73 of the Act. The respondent is entitle to initiate proceedings as per applicable provision for non-filing of return. However, in the present case, the respondent has imposed the late fee under Section 47 of the Act and also penalty under Section 125 of the Act. In the present case, penalty was imposed in the form of late fee in terms of Section 47 of the Act. Therefore, general penalty of Rs. 50,000/- towards CGST and SGST is not correct and the same is set aside. As far as late fee is concerned, the same is confirmed. This writ petition is partly allowed. ISSUES PRESENTED and CONSIDERED:- Whether the notice issued under Section 47 r/w 73 of the TNGST Act, 2017 was validRs.- Whether the petitioner's challenge to the imposition of late fee without prior notice was justifiedRs.ISSUE-WISE DETAILED ANALYSIS:Issue 1: Validity of Notice under Section 47 r/w 73 of the Act- Relevant legal framework and precedents:Section 47 of the TNGST Act, 2017 provides for the imposition of late fees for failure to file returns. Section 73 pertains to the determination of tax.- Court's interpretation and reasoning:The Court found that the notice issued under Section 47 r/w 73 of the Act was valid as it was in response to the petitioner's delay in filing the annual return, which attracted late fees under Section 47(2).- Key evidence and findings:The petitioner had delayed filing the annual return, leading to the imposition of late fees by the respondent.- Application of law to facts:The Court determined that the respondent was entitled to initiate proceedings under the applicable provisions for non-filing of returns, including imposing late fees under Section 47 of the Act.- Conclusions:The Court upheld the validity of the notice issued under Section 47 r/w 73 of the Act, finding no fault in the respondent's actions in imposing late fees for the delay in filing the annual return.Issue 2: Challenge to Imposition of Late Fee without Prior Notice- Relevant legal framework and precedents:Section 125 of the Act provides for penalties for contraventions where no separate penalty is provided.- Court's interpretation and reasoning:The Court held that the imposition of late fees under Section 47 of the Act was justified. However, the general penalty of Rs. 50,000 towards CGST and SGST was set aside as no separate penalty provision applied.- Key evidence and findings:The petitioner challenged the imposition of late fees without prior notice, arguing that no notice was issued before the show cause notice under Section 73 of the Act.- Application of law to facts:The Court found that the late fee imposed under Section 47 of the Act was valid, but the general penalty under Section 125 was not applicable in this case.- Conclusions:The Court partly allowed the writ petition, confirming the late fee but setting aside the general penalty imposed under Section 125 of the Act.SIGNIFICANT HOLDINGS:- The notice issued under Section 47 r/w 73 of the Act was deemed valid, allowing the respondent to impose late fees for the delay in filing the annual return.- The imposition of late fees under Section 47 of the Act was upheld, while the general penalty under Section 125 was set aside in this case.- 'With the above observation, this writ petition is partly allowed. There is no order as to costs. Consequently, connected miscellaneous petition is closed.'