GST annual return filing delay: s.47 late fee already applied, so s.125 general penalty quashed; late fee recalculated, account defrozen.

General penalty under s.125 CGST/SGST for failure to file annual returns was held inapplicable where late fee had already been levied under s.47, since s.125 operates only where no specific penalty/late fee is provided; consequently, the general penalty was quashed. On late fee under s.47(2), the HC held the authority erred in computing the statutory maximum separately for CGST and SGST; the permissible aggregate late fee had to be determined first and only then apportioned equally between CGST and SGST, resulting in a reduced late fee. The petitioner was directed to pay the corrected late fee, upon which the bank account was ordered to be defrozen.

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ISSUES PRESENTED AND CONSIDERED

1) Whether a general penalty under Section 125 of the State GST enactment can be levied when late fee has already been levied under Section 47 for failure to file the annual return.

2) Whether the late fee for failure to furnish the annual return was correctly computed under Section 47(2), including whether the amount could be separately imposed as equal components for CGST and SGST without first determining the total late fee payable.

3) Whether, upon determination of the lawful late fee payable, the Court should direct restoration of operation of the taxpayer's bank account, subject to proof of payment.

ISSUE-WISE DETAILED ANALYSIS

Issue 1: Levy of general penalty under Section 125 when late fee under Section 47 is imposed

Legal framework: The Court examined Section 47 (late fee for delayed/failed furnishing of returns) and Section 125 (general penalty) of the State GST enactment as applied in the impugned order.

Interpretation and reasoning: The Court held that Section 125 applies only where no penalty/late fee is levied under Section 47. Since late fee had already been levied under Section 47 for the failure to file annual returns, invoking Section 125 for an additional "general penalty" was impermissible.

Conclusion: The general penalty of Rs. 50,000/- levied under Section 125 was set aside as not applicable in the presence of a levy under Section 47.

Issue 2: Correct computation of late fee under Section 47(2)

Legal framework: The Court applied Section 47(2), which provides for late fee for failure to furnish the annual return, computed as a per-day amount subject to a statutory maximum linked to turnover in the State.

Interpretation and reasoning: The Court found the authority's approach erroneous in treating Rs. 75,025/- as the late fee for each of CGST and SGST (thereby totalling Rs. 1,50,050/-) without first determining the correct total late fee payable and then apportioning it. The Court reasoned that the late fee must first be calculated as a single amount under Section 47(2), and only thereafter divided between SGST and CGST components. On the authority's own figure of Rs. 75,025/- as the base late fee, the correct division resulted in Rs. 37,512.50/- for SGST and Rs. 37,512.50/- for CGST.

Conclusion: The late fee was modified to Rs. 37,512.50/- (SGST) and Rs. 37,512.50/- (CGST), directing payment of total late fee of Rs. 75,025/-.

Issue 3: Direction to permit operation of the bank account upon payment of late fee

Interpretation and reasoning: The Court accepted that the account to be acted upon was the account maintained at the stated branch identified during hearing. In view of the modification of the demand, the Court linked restoration of banking operations to compliance with the lawful late fee determined by the Court.

Conclusion: Upon payment of late fee of Rs. 75,025/- and production of proof of such payment, the bank was directed to permit operation of the taxpayer's bank account.

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