Liability Paid, Yet Recovery Being Initiated!

[Narayan Pujar]

An order u/s 74 was passed against one of my clients by the CGST Department, imposing a 100% penalty. This was because, at the time of passing the order, the officer couldn’t confirm if the client would avail the relief under Section 74(11), which allows a 50% penalty reduction if payment is made within 30 days.

The client has since made the payment within the stipulated time and adjusted all liabilities using the DRC-03A functionality. However, the SGST Department, which handles recovery, is still demanding the remaining 50% penalty. They argue it’s recoverable solely because it appears in the E-Liability Ledger, which they claim they cannot update.

Despite discharging all liabilities as per law, the SGST officer is threatening bank attachment for the so-called 'outstanding' penalty. The Central GST Officer is reluctant in rectifying order to 50% penalty as it does not fall within Section 161.

What could be a possible solution to resolve this situation?

AI Summary

Client Faces 100% Penalty Despite Timely Payment; SGST Demands More, Citing E-Liability Ledger and Threatens Bank Attachment. A client was penalized 100% by the CGST Department under Section 74 due to uncertainty about availing a 50% penalty reduction if paid within 30 days. After the client paid within the timeframe, the SGST Department still demands the remaining 50% penalty, citing the E-Liability Ledger. Despite fulfilling legal obligations, the SGST officer threatens bank attachment. Responses suggest making a factual representation to the Joint Commissioner, emphasizing the mandatory nature of Section 74(11), and potentially seeking rectification or court intervention. It is argued that portal issues cannot override statutory provisions.