2025 (7) TMI 1251 - HC - GST

GST waiver application gets second chance after tax deposit under Section 128A and 161

The HC set aside orders rejecting waiver application under Section 128A and rectification petition under Section 161 of the GST Act. The court directed ... Application for waiver of interest and penalty - Rejection of application under Section 128A and a petition u/s 161 of the Odisha Goods and Services Tax Act, 2017/the Central Goods and Services Tax Act, 2017 - HELD THAT:- This Court sets aside the order in Form GST SPL-07, dated 09.06.2025 and the order dated 10.06.2025 passed under Section 161 of the GST Act rejecting petition for rectification and directs the Petitioner to deposit the amount of tax as raised vide assessment order dated 16.02.2022 within a week hence. In the event of such deposit being made within the stipulated time, the Additional CT & GST Officer, CT & GST Circle, Jajpur, Jajpur Road shall consider the application for waiver of interest and penalty submitted under Section 128A of the GST Act afresh on in its own merit. Petition disposed off. ISSUES: Whether an application under Section 128A of the GST Act for waiver of interest and penalty can be rejected on the ground that the tax amount has not been deposited despite an assessment order raising demand including tax, interest, and penalty.Whether a petition under Section 161 of the GST Act for rectification of the order rejecting the Section 128A application should be allowed when the Electronic Liability Ledger shows tax as '0' but the assessment order reflects a tax demand.Whether the assessing authority is obliged to consider an application for waiver of interest and penalty under Section 128A if the tax liability has not been discharged.Whether the Court can direct the authority to reconsider the application under Section 128A upon deposit of the tax amount raised in the assessment order. RULINGS / HOLDINGS: The application under Section 128A was rightly rejected because the Petitioner had not deposited the amount of tax, which is a 'basic requirement for availing benefit of waiver of interest and penalty' under Section 128A.The petition under Section 161 for rectification of the rejection order was properly dismissed since the assessing authority's records correctly reflected the tax demand, notwithstanding the Electronic Liability Ledger showing tax as '0'.The assessing authority is empowered to reject the waiver application if the precondition of discharge of tax liability is not satisfied, as per the statutory framework under the GST Act.The Court set aside the orders rejecting the application and petition, directing the Petitioner to deposit the tax amount within a stipulated time, and upon such deposit, the authority shall reconsider the application under Section 128A on its own merit. RATIONALE: The Court applied the provisions of Sections 73, 128A, and 161 of the Central and Odisha Goods and Services Tax Acts, 2017, along with Rule 164(1) of the GST Rules.Section 128A requires the tax liability to be discharged before an application for waiver of interest and penalty can be considered, establishing a statutory precondition for relief.The Court recognized the discrepancy between the Electronic Liability Ledger and the assessment order but held that the assessment order reflecting tax demand governs the statutory obligation.The Court exercised its supervisory jurisdiction under Articles 226 and 227 of the Constitution to direct the deposit of tax and reconsideration of the waiver application, emphasizing adherence to statutory requirements without denying procedural fairness.