Simon India Limited. Vs Assistant Commissioner of CT & GST (Orissa High Court)
The Orissa High Court examined a writ petition challenging rejection of an application seeking waiver of interest and penalty under Section 128A of the GST Act. The petitioner, a GST-registered company executing works contracts, was subjected to audit and issued a show cause notice under Section 73 for the tax period July 2017 to March 2018. An adjudication order dated 27 December 2023 raised demands of tax, interest, and penalty under the GST and IGST Acts. The petitioner filed an appeal under Section 107, made the mandatory pre-deposit, and while the appeal was pending, the GST Council recommended waiver of interest and penalty for specified periods, provided the entire tax demand was paid by 31 March 2025. This recommendation was implemented through insertion of Section 128A and Rule 164.
Seeking the benefit, the petitioner withdrew the appeal, discharged the tax demand partly through cash and partly through credit ledger, and filed an application in Form GST SPL-02. The application was rejected by the Assistant Commissioner on the ground that tax payable under reverse charge mechanism (RCM) under IGST had to be paid entirely in cash and not through ITC. The petitioner contended that it was under a bona fide belief regarding the mode of payment and, if given an opportunity, would pay the amount in cash.
