2026 (4) TMI 286 - HC - GST

Waiver application under CGST Scheme cannot be rejected on a mistaken demand description; true tax, interest and penalty must govern.

Rejection of a waiver application under Section 128A of the CGST Act was unsustainable where the summary assessment proceedings wrongly described the ... Rejection of the petitioner's application under Section 128A - GST amnesty waiver - Clerical error in summary assessment. GST amnesty waiver - Non-perpetuation of ascertainable mistake - HELD THAT: - The Court found from the original order that the demand was not confined to penalty alone, but included tax and interest as distinct components, with only part of the demand representing penalty. Once that position was apparent from the record, the error in the summary assessment proceedings showing the entire amount under penalty was merely an ascertainable human error. Such a mistake could not be carried forward while deciding the application under Section 128A waiver. The authority considering the waiver ought to have examined the correctness of the summary proceedings and decided the application on its own merits instead of rejecting it solely on that erroneous basis. [Paras 7, 8] The impugned order was set aside and the matter was remanded for fresh consideration, with a direction to treat the demand as comprising tax, interest and penalty and to consider the waiver application afresh, subject to the petitioner's eligibility under the scheme, after hearing the petitioner. Final Conclusion: The writ petition was allowed. The rejection of waiver under the scheme was set aside because it proceeded on an apparent clerical error in the summary proceedings, and the application was directed to be reconsidered on merits. Issues: Whether the rejection of the petitioner's application under Section 128A of the CGST Act, 2017 was sustainable when the summary assessment proceedings erroneously reflected the demand as penalty alone instead of tax, interest and penalty.Analysis: The original assessment order disclosed components of tax, interest and penalty, and the error in the summary assessment proceedings could be identified from the record itself. A mistaken description in the summary proceedings could not be allowed to govern the consideration of the waiver application. The authority was required to examine the correctness of the demand and decide the application on its own merits under the Scheme.Conclusion: The rejection of the waiver application was unsustainable. The matter was remanded to the first respondent for fresh consideration, and the demand was directed to be treated as tax, interest and penalty for the purpose of the Scheme.