Penal late fee under concessional notification bars imposition of an additional general penalty; general penalty quashed.

Whether a general penalty under Section 125 can be imposed where a concessional late fee under Section 47 has been levied was central; the court applied the ratio from Ms. Kandan Hardware Mart that a penal late fee paid under notifications operates as the statutory penalty for the default, leaving no scope for an additional general penalty. The petitioner challenged only the general penalty after late fee was adjusted under the notifications. The impugned order was quashed insofar as it imposed the general penalty and relief was granted to the assessee.

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Issues: Whether the imposition of a "General Penalty" under Section 125 of the respective GST enactments can be sustained where a concessional "Late Fee" under Section 47 of the respective GST enactments has been levied/accepted in terms of the notifications allowing reduced late fee.

Analysis: The Court examined the challenge to the general penalty imposed for non-filing of annual returns in light of the decision in Ms. Kandan Hardware Mart (batch decision dated 02.01.2026), which held that where taxpayers filed annual returns within the period permitted by the notifications granting concessional late fee, the late fee under Section 47(2) is penal in nature. The ratio adopted in that decision is that a penal late fee levied at a concessional rate under the notifications operates as the penalty for the default, and therefore there is no scope to impose an additional general penalty under Section 125 of the GST enactments over and above the late fee so levied. The petitioner in the present writ petition challenged only the imposition of the general penalty; the proposal for late fee was dropped or adjusted in accordance with the notifications permitting concessional payment.

Conclusion: Impugned order quashed insofar as it relates to levy of the general penalty under Section 125 of the respective GST enactments; petition allowed and consequential relief granted in favour of the assessee.

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