GST Amnesty Rejection Held Unsustainable When Section 73 Case Pending Before HC

Rejection of Amnesty Scheme under Section 128A vide SPL-02 while matter is pending before High Court u/s 73:

A. Issue:

Where interest/penalty flows from an adjudication under Section 73 (covered period, non‑fraud), and tax dues are fully discharged, Application under section 128A filed in Form SPL-02; as the disputed Penalty and Interest is not covered by the 75(12) exclusions but squarely within Section 128A(1) read with Para 4(4) of Circular 238/32/2024‑GST. It is worth to note that the Writ petition was pending before the High Court. Now the SPL-2 has been rejected issuing SPL-07stating that the taxable person is covered under exception to Para 4 [4] of the Mentioned circular.

B. Core legal position:

1. Scheme anchor: Section 128A CGST Act read with Rule 164 and Circular No. 238/32/2024‑GST.

2. Rejection ground: Para 4(4) – exclusion where interest is “on delayed filing of returns / delayed reporting of supplies”, i.e., interest on self‑assessed tax directly recoverable under Section 75(12).

C. Next steps – precise action points:

1. File appeal against SPL‑07

• • File FORM GST APL‑01 against the rejection order in FORM GST SPL‑07 under Section 107(1) within 3 months from the date of communication (plus 1 month condonable).
  • Order Type: “Waiver Application Rejection Order” (as per Rule 164 read with portal advisory).

2. Pleadings / grounds (sharply framed):

• • Refer: Section 73, Section 75(12), Section 107, Section 128A, Rule 164(15).
  • Point out that:
    • SCN and OIO were under Section 73, not a pure 75(12) self‑assessment case.
    • Tax component for the period is fully paid; surviving dispute is only on interest and penalty on an adjudicated demand.
    • Therefore, application made under Section 128A(1) coverage having conditions fulfilled and not within the exclusion of para 4(4) of Circular 238/32/2024‑GST.

D. Annexures with APL‑01:

• • High Court order (showing tax already paid and only interest/penalty sustained).
  • OIO under Section 73 and any appellate orders under Sections 107/108.
  • Proof of tax payment (DRC‑03 / ELR details).
  • Copy of SPL‑02 application and SPL‑07 rejection.
  • Working note clearly reconciling that interest is adjudicated interest, not interest merely on delayed GSTR‑3B filing on self‑assessed tax.

3. Post‑appeal consequences (Rule 164)

• • If appeal is allowed: Appellate Authority issues SPL‑06, granting waiver of interest/penalty and modifying ELR Part‑II; proceedings conclude under Section 128A(4)/(5).
  • If appeal is rejected:
    • Use FORM GST SPL‑08 to restore the earlier withdrawn appeal/writ, as permitted under Rule 164(15)(b)(ii), provided undertaking is filed within the prescribed time.
    • Then pursue regular appellate or writ remedy on the merits of interest/penalty as per Sections 107/112 or Article 226.

E. Conclusion:

If your Section 128A waiver application (SPL-02) gets rejected via SPL-07, don’t worry – file an appeal in FORM APL-01 under Section 107 within 3 months. Prove your interest/penalty comes from a Section 73 order (tax fully paid), not self-assessed delays under Section 75(12). Attach High Court order, payment proofs, and SPL forms.

Appeal success? Get SPL-06 waiver instantly. If lost? Then Prefer writ under Article 226 of the Indian Constitution. This smart path saves time, cuts litigation, and secures relief for 2017-20 dues. Act fast—portal’s ready!

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