TaxTMI 
TaxTMI 
2026 (8) TMI 777
X X X X Extracts X X X X
X X X X Extracts X X X X
....ka Versus The State Tax Officer, Hosur, The Assistant Commissioner (ST), Chennai And M/s.KGK Industries, (Represented by its Managing Partner Mr.R.Krishnamurthy) Versus Deputy Commercial Tax Officer, Coimbatore. And Tvl. Constient Global Solutions Private Limited Versus Assistant commissioner (ST) (FAC), Chennai And Mr R.Venkataramanan, M/s. Greenland Associates Versus The State Tax Officer ABC Ceramic Services Versus The Assistant Commissioner ST, Chennai And Tvl.Ovviya Construction Versus Deputy Commercial Tax Officer, Panruti, Cuddalore. Sharmila Sundar Proprietrix Versus The Deputy Commercial Tax Officer, The Appellate Deputy Commissioner (ST), Deputy State Tax Officer And Tvl R K Enterprises, Rep by its Accountant, Ms.Kalaivani Suresh Versus The State Tax Officer (ST), And TVL Chenni Spun Pipes Represented by its Proprietor, Mrs. Annasamy Parameswari Versus Assistant Commissioner (ST), The State Tax Officer, Tamil Nadu And M/s.Keen Erectors Versus The Assistant Commissioner Mettur, Salem-II, Salem. And Tvl Senthil Security Solutions Represented by its Partner Senthilraja Kandasamy Versus Assistant Commissioner (ST), Chennai. Hon'ble Mr Justice Senthilkumar Ramamoorthy ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (Circular No.238) is contrary to Section 128A insofar as it excludes cases falling within the scope of sub-section (12) of Section 75 from the ambit and scope of Section 128A. (iii) Rule 164 prescribes time limits for issuance of notice in Form GST SPL-03 and for issuance of an order of rejection in Form GST SPL-07. If an order is not passed within the time limits specified in sub-rule (13), the application shall be deemed to be approved and the proceeding shall be deemed to be concluded. (iv) Orders issued in Form GST SPL-05 become void only in cases where sub-rule (16) or sub-rule (17) applies. Sub-rules (16) and (17) of Rule 164 do not enable the proper officer to issue a void order after accepting the application and issuing an order in Form GST SPL-05. However, in some cases, orders declaring Form GST SPL-05 orders issued earlier void have been issued ("void orders"), even though sub-rule (16) or sub-rule (17) has no relevance or applicability. (v) Sub-rule (6) of Rule 164 does not mandate the filing of an application for waiver within a period of three months from the notified date. This follows from the use of the permissive word "may" in said sub....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... which deals with recovery of determined or admitted liability. (iii) Section 75(12) pertains to amounts payable as self-assessed tax. Said provision opens with a non obstante clause and is intended to override anything inconsistent therewith in Sections 73 or 74 or 74A. (iv) Section 75 (12) was introduced to enable the Tax Department to directly resort to recovery measures under Section 79 in case of nonpayment of self-assessed tax. The Explanation to sub-section (12) of Section 75 was introduced after taking note of the fact that a higher value was being reported in the GSTR-1 return, whereas a lower amount was being reflected in the corresponding GSTR- 3B return resulting in short payment of admitted taxes. (v) Section 80, which deals with an application for payment of taxes in installments, expressly excludes self-assessed liability. This indicates that self-assessed liabilities and liabilities determined by adjudication are dealt with separately in the statute. (vi) If Section 128A is interpreted by bearing in mind the overall scheme of the statute, there is an implied exclusion of cases falling within the purview of sub-section (12) of Sect....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion of Section 128A is the central issue in these cases. The genesis of said provision is traceable to proceedings of the GST Council. Relevant extracts from the 53rd GST Council Meeting are set out below: "Agenda Item 3(vii): Insertion of Section 128A in CGST Act, to provide for conditional waiver of interest or penalty or both relating to demands raised under Section 73. for FY 2017-18 to FY 2019-20. 4.91 The Pr. Commissioner, GST Policy Wing stated that a large number of representations have been received seeking relief from interest and penalties, considering the challenges faced by taxpayers during the initial years of implementation of GST and to encourage compliance and support businesses to move forward. 4.92 He stated that Law Committee deliberated on this issue and recommended providing a waiver of interest and penalty to the demand notices issued under Section 73 of the CGST Act, 2017, for FY 2017-18, FY 2018-19 and FY 2019-20, i.e. cases not involving fraud or wilful misstatement or suppression of facts, subject to the condition that the said taxpayer pays the full amount of tax demanded upto a date as may be notified on the recommendations of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt or the order referred to in clause (a), clause (b) or clause (c), as the case may be, on or before the date, as may be notified by the Government on the recommendations of the Council, no interest under section 50 and penalty under this Act, shall be payable and all the proceedings in respect of the said notice or order or statement, as the case may be, shall be deemed to be concluded, subject to such conditions as may be prescribed: Provided that where a notice has been issued under subsection (1) of section 74, and an order is passed or required to be passed by the proper officer in pursuance of the direction of the Appellate Authority or Appellate Tribunal or a court in accordance with the provisions of sub-section (2) of section 75, the said notice or order shall be considered to be a notice or order, as the case may be, referred to in clause (a) or clause (b) of this sub-section: Provided further that the conclusion of the proceedings under this sub-section, in cases where an application is filed under sub-section (3) of section 107 or under sub-section (3) of section 112 or an appeal is filed by an officer of central tax under sub-section (1) of section 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....been issued either under sub-section (11) of Section 107 or sub-section (1) of Section 108. Clause (c) is attracted in cases wherein an order has been issued by the appellate authority either under sub-section (11) of Section 107 or sub-section (1) of Section 108, but no order has been passed by the appellate tribunal under sub-section (1) of Section 113. 10. If a case were to fall within any of these clauses, it becomes possible for the taxable person to lodge an application subject to satisfaction of the following conditions: (a) the tax payable should relate to the period running from 01.07.2017 to 31.03.2020 or a part thereof; (b) the taxable person should pay the full amount of tax as per the notice, statement or order, as the case may be, referred to in the above three clauses; (c) the payment is required to be made on or before the date notified by the Government on the recommendation of the GST Council; (d) no appeal or writ petition should be pending as on the notified date before the appellate authority or appellate tribunal or court in respect of the subject matter of the waiver application; (e) the application for waiver s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pect of orders mentioned in clauses (b) and (c) of sub-section (1) of section 128A, may file an application electronically in FORM GST SPL 02 on the common portal, providing the details of the said order, along with the details of the payments made towards the tax demanded: PROVIDED that the payment towards such tax demanded shall be made only by crediting the amount in the electronic liability register against the debit entry created by the said order: PROVIDED FURTHER that if the payment towards such tax demanded has been made through FORM GST DRC-03, an application in FORM GST DRC-03A, as prescribed in sub-rule (2B) of rule 142, shall be filed by the said person for credit of the said amount in the Electronic Liability Register against the debit entry created for the said demand, before filing the application in FORM GST SPL 02. (3) Where the notice or statement or order mentioned in sub-section (1) of section 128A includes demand of tax, partially on account of erroneous refund and partially for other reasons, an application under sub- rule (1) or sub-rule (2) may be filed only after payment of the full amount of tax demanded in the said notice or sta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t petition filed before the Appellate Authority or Appellate Tribunal or a court, as the case may be, but the order for withdrawal has not been issued by the concerned authority till the date of filing of the application under sub-rule (1) or sub-rule (2), the applicant shall upload the copy of such application or document filed for withdrawal of the said appeal or writ petition along with the application under sub-rule (1) or subrule (2), and shall upload the copy of the order for withdrawal of the said appeal or writ petition on the common portal, within one month of the issuance of the said order for withdrawal by the concerned authority: PROVIDED FURTHER that where the notice or statement or order mentioned in sub-section(1) of section 128A of the Act includes demand of tax, partially for the period mentioned in the said sub-section and partially for the period other than that mentioned in the said sub-section, the applicant instead of withdrawing the appeal, shall intimate the appellate authority or Appellate Tribunal that he does not wish to pursue the appeal for the period mentioned in the said subsection and the relevant authority shall, after taking note of the sa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ule (10) within a period of three months from the date of receipt of the application in FORM GST SPL-01 or FORM GST SPL-02, as the case may be. (b) In cases where notice in FORM GST SPL-03 has been issued, the proper officer shall issue the order in subrule (10) or sub-rule (12) within a period of three months from the date of receipt of reply of the applicant in FORM GST SPL-04, or within a period of four months from the date of issuance of notice in FORM GST SPL-03 where no reply is received from the applicant. Explanation.-For the purposes of this sub-rule, in cases referred to in the proviso to sub-rule (7), the time period from the date of filing of the application under sub-rule (1) or subrule (2) till the date of submission of the order for withdrawal of the appeal or the writ, as the case may be, shall not be included while calculating the time period under clause (a) or clause (b) of this sub-rule. (14) If no order is issued by the proper officer within the time limit specified in sub-rule (13), then the application in FORM GST SPL-01 or FORM GST SPL-02, as the case may be, shall be deemed to be approved and the proceedings shall be deemed to be ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion (1) of section 128A, and the details of such amount have been mentioned in FORM GST SPL-05 or FORM GST SPL-06, the applicant shall pay the said amount of interest, or penalty, or both, within a period of three months from the date of issuance of the order in FORM GST SPL-05 or FORM GST SPL-06, as the case may be, and where the said amount is not paid within the said time period, the waiver of interest, or penalty, or both, under section 128A as per the order issued in FORM GST SPL-05 or FORM GST SPL-06, shall become void. Explanation.-For the purposes of this rule, the proper officer for issuance of order under this rule,- (a) in cases where the application for waiver of interest, or penalty, or both is made with respect to a notice or statement mentioned in clause (a) of sub-section (1) of section 128A, shall be the proper officer for issuance of order as per section 73; and (b) in cases where the application for waiver of interest, or penalty, or both, is made with respect to an order mentioned in clause (b) or clause (c) of sub-section (1) of section 128A, shall be the proper officer referred to in section 79 of the Act.]" (emphasis added) 15....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ases after issuing an order in Form GST SPL-05. Except in the situations specified in sub-rules (16) and (17), neither the statute nor the rule enables the issuance of a void order. Is there an implied exclusion of self-assessed tax in Section 128A? 18. The principal contention on behalf of the revenue is that Section 128A, by necessary implication, excludes cases falling within the scope of Section 75(12). In order to determine this issue, it is necessary to turn to Section 75(12). Said provision reads as under: "Notwithstanding anything contained in section 73 or section 74 or section 74A, where any amount of self- assessed tax in accordance with a return furnished under section 39 remains unpaid, either wholly or partly, or any amount of interest payable on such tax remains unpaid, the same shall be recovered under the provisions of section 79. Explanation : For purposes of this sub-section, the expression "self-assessed tax" shall include the tax payable in respect of details of outward supplies furnished under section 37, but not included in the return furnished under section 39." It is pertinent to point out that sub-section (12) was part of the statut....
X X X X Extracts X X X X
X X X X Extracts X X X X
....under: "73. (1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised for any reason, other than the reason of fraud or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty leviable under the provisions of this Act or the rules made thereunder. (2) The proper officer shall issue the notice under subsection (1) at least three months prior to the time limit specified in sub-section (10) for issuance of order. (3) Where a notice has been issued for any period under sub-section (1), the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for such periods....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d into service, the possibility of the taxable person contending that determination is necessary because there is no self-assessed liability, as per Section 75(12), or because the Explanation is inapplicable cannot be ruled out. This, however, is a distinct matter that may fall for adjudication in an appropriate case, but need not be decided for present purposes. 25. Contending that Section 128A is a machinery provision not warranting strict construction, Ms. Amirta relied on paragraphs 9 and 16 of JK Synthetics and paragraph 27 of Associated Cement. Reliance on these judgments does not advance the cause of the revenue. In JK Synthetics, a five judge bench of the Supreme Court concluded that interest liability under Section 11B of the Rajasthan Sales Tax Act, 1954 will not accrue from the date of filing the self-assessed return by endorsing the minority view in Associated Cement. In passing, the Court observed that machinery provisions should be construed so as to effectuate the object and purpose of the statute. Merely because Section 128A is not a charging provision, it does not follow that an implied exclusion of self-assessed tax should be read into said provision. Any such ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er of interest and penalty to a taxable person against whom determination proceedings are pending in relation to the period running from 01.07.2017 to 31.03.2020 (i.e. the initial years of GST laws implementation) provided such proceedings did not arise as a result of bad faith or mala fide conduct by the taxable person. The taxable person is incentivized by the waiver; the tax department by reducing the case load and thereby enabling redeployment of resources; and the Central and State Government concerned by the collection of taxes without awaiting determination-related original or appellate proceedings and recovery proceedings. 29. The revenue relied on Circular No.238 to contend that nonpayment of self-assessed tax falls outside the scope of Section 128A. In particular, reliance was placed on the following clarification therein: S.No. Issue Clarification 4 Whether the benefit provided under Section 128A will be applicable in cases, where the tax due has already been paid and the notice or demand orders under Section 73 only pertains to interest and/or penalty involved? Where the tax due has already been paid and the notice or demand orders under Section 73 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....In other words, it is no more than an enabling rule. If the taxable person were to opt to file such application, the time limit prescribed in the sub-rule becomes applicable. For the above reason, I am unable to endorse the view expressed in Sri Lakshmi Borewell and Akshaya Borewells. Nonetheless, it remains to be considered whether the stipulated time period is mandatory and this cannot be determined definitively without looking at the immediate context. It is instructive to first look at the proviso. 32. The proviso applies to cases wherein a determination is made under sub-section (2) of Section 75 that the proceedings should be conducted under Section 73 and not under Section 74. In those cases, the proviso fixes a time limit of six months from the date of communication of the order of the proper officer re-determining tax under Section 73. The proviso uses the mandatory word "shall". If the proviso were to be construed, therefore, as mandatory, it would be anomalous that a mandatory time limit is prescribed only in cases where there is re-determination pursuant to an order under Section 75(2) but not otherwise. The other subrules in Rule 164, therefore, warrant consideratio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ompliance with the requirements of the Amnesty Scheme. By relying on the judgment of the Hon'ble Supreme Court in Hari Chand Shri Gopal, it was submitted that the doctrine of substantial compliance applies in relation to exemption clauses in tax statutes notwithstanding the general rule that such clauses should be subject to strict construction. This contention warrants careful consideration. Learned counsel also referred to the judgment of the Hon'ble Supreme Court in Yashi Constructions to contend that the Amnesty Scheme under Section 128A is distinguishable from the amnesty scheme considered by the Hon'ble Supreme Court therein (Sabka Vishwas Legacy Dispute Resolution Scheme, 2019) inasmuch as payment precedes lodging of an application under the Amnesty Scheme under consideration in these cases. 36. In order to decide whether there is substantial compliance, it becomes necessary to examine whether such non-compliance relates to the substance or essence of the prescription in the waiver scheme. At paragraphs 33 and 34 of the judgment in Hari Chand Shri Gopal, the Hon'ble Supreme Court instructed as under: "33. A fiscal statute generally seeks to preserve the need to c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....omply with all requirements of Section 128A read with Rule 164 except for filing the application for waiver in the form of a letter instead of filing it in Form GST SPL 01 or SPL 02, as the case may be, there would be a strong case to hold that there is substantial compliance. Another illustration: a taxable person, who satisfies all the requirements, endeavours to file the application on the last date but is unable to do so on account of a technical glitch and succeeds on the following date. Subject to providing proof of the above, this could qualify as substantial compliance. 38. The conclusions that follow from the above discussion and analysis of the relevant provisions may be summarised as under: (i) The initiation of proceedings under Section 73 of applicable GST enactments is a sine qua non for filing an application for waiver. (ii) If recovery measures were to be initiated under Section 79 of applicable GST enactments, without invoking Section 73, by relying on Section 75(12), the taxable person cannot file an application under Section 128A. On the other hand, once the revenue decides to determine liability under Section 73, whether in relation to self-....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Impex The Deputy Commercial Tax Officer 31.03.2025 19.06.2025 Not filed 08.09.2025 Per Para 4 of Circular No. 238/32/2024-GST, Section 128A waiver does not extend to interest on delayed return filing or delayed reporting of supplies, as this relates to self-assessed liability recoverable under Section 75(12) of the CGST Act. 1311, 1317 & 1320 of 2026 Tvl. Goodwill Services The Assistant Commissioner (ST) Unclear (However, it is deducible from the date of SCN that the application was made within time.) 02.06.2025 Not filed 20.11.2025 The interest amount pertaining to the belated filing of GSTR-3B returns is not eligible for waiver under the scheme. 44260 & 44263 of 2025 M/s. Keen Erectors The Assistant Commissioner Unclear (However, it is deducible from the date of SCN that the application was made within time.) 14.05.2025 Not filed 11.10.2025 Interest levied for belated filing of GSTR 3B return cannot be waived 6199 of 2026 Tvl. Classic Services The Assistant Commissioner (ST) 30.06.2025 12.09.2025 Not filed 07.11.2025 The waiver is sought for interest only. Hence, not eligible. 6246 of 20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....5. Subsequently, an order declaring the earlier order to be void was issued. These orders are also invalid for reasons discussed earlier and are liable to be set aside. The particulars of these cases are set out below: W.P. No. Petitioner Respondent/ 1st Respondent Application Date (Form GST SPL 02) Date of SCN (Form GST SPL 03) Reply (Form GST SPL 04) Form GST SPL 05 Void Order (Impugned order) Reason for rejection stated in Void Order 44253 of 2026 Tvl. Chenni Spun Pipes Assistant Commissioner (ST) 07.03.2025 06.05.2025 08.05.2025 13.05.2025 27.10.2025 Waiver shall not be applicable in the cases where interest has been demanded on account of delayed filing of returns/ reporting 7928 of 2026 Tvl. Senthil Security Solutions Assistant Commissioner (ST) 12.06.2025 27.06.2025 28.06.2025 11.07.2025 17.12.2025 Ineligible for the waiver as per Circular 238/32/2024 as the waiver was sought for a defect pertaining to GSTR - 7 Vs GSTR - 3B 23886 of 2026 Greenland Associates State Tax Officer 31.03.2025....