Madhu Sudan Periwal Vs State of Bihar (Patna High Court)
The Patna High Court dismissed the writ application filed by Madhu Sudan Periwal, proprietor of M/S Tirupati Distributors, challenging the demand order dated 24.02.2025 passed by respondent no. 3 under Section 73(9) of the Central Goods and Services Tax Act, 2017/State Goods and Services Act, 2017. The impugned order imposed a late fee of Rs. 2,00,000/- on the petitioner.
The petitioner, a proprietorship firm engaged in the business of medicines and registered under GST with G.S.TIN No. 10AHCPP9269KIZI, contended that the determination of tax and penalty had come to a naught, while the late fee was imposed under Section 47 of the CGST Act. It was argued that the levy made under Section 73(9) was without jurisdiction because Section 73(1) applies where tax has not been paid or has been short paid, tax has been erroneously refunded, or input tax credit has been wrongly availed or utilised. According to the petitioner, Section 73(1) is confined to determination of tax and input tax credit and does not cover adjudication or recovery of late fee.
The petitioner further submitted that the relevant tax period was 2020-2021 and challenged the demand for late fee as being without jurisdiction.
The State opposed the writ application. It submitted that the demand notice dated 24.02.2025 could have been challenged by filing an appeal within 90 days plus 30 days, but the petitioner had not availed that remedy and instead approached the High Court after about one year. The State also relied upon Section 47 of the CGST/SGST Acts, which specifically provides for levy of late fee. It submitted that since the petitioner had failed to file the return, the late fee was found leviable during the assessment proceedings under Section 73.
After considering the rival submissions, the High Court noted that the petitioner had failed to file the return for the tax period 2020-2021. The respondent authority had issued a show-cause notice and thereafter assessed the tax as well as late fee under Section 73 read with Section 47 of the Act.
The Court accordingly found no infirmity in the demand notice. Holding that the writ application had no merit, the Patna High Court dismissed it.
FULL TEXT OF THE JUDGMENT/ORDER OF PATNA HIGH COURT
The petitioner has filed the present writ application for quashing the order of demand dated 24.02.2025, passed by respondent no. 3 under Section 73 (9) of the Central Goods and Services Tax Act, 2017/ State Goods and Services Act, 2017, by which a late fee of Rs. 2,00,000/- has been imposed upon the petitioner.
2. Learned counsel for the petitioner submits that the petitioner is a proprietorship firm under the name and style of “M/S Tirupati Distributors” and is engaged in the business of medicines. The petitioner has been registered under G.S.T having G.S.TIN No. 10AHCPP9269KIZI.
3. Learned counsel for the petitioner submits that determination of tax and penalty has come to a naught but, a late fee of Rs. 2,00,000/- has been imposed under Section 47 of the Central Goods and Services Act, 2017. The assessment of levy done under Section 73 (9) is without jurisdiction and the fine cannot be levied under Section 73 of the Act.
4. He further submits that tax period is of 2020-2021 and the demand of late fee is only without jurisdiction. Section 73(1) of the Act restricts its applicability to the situation where any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilized. The scope of statutory provision under Section 73(1) is limited to the imposition of tax and input tax credit and omits the adjudication or recovery of late fee from its ambit.
5. Learned counsel for the State argued that the demand notice for late fee is dated 24.02.2025, against which the petitioner could have filed appeal within 90 days + 30 days, but the petitioner has not filed appeal and has directly after lapse of about one year has filed the present writ application.
6. Learned counsel for the State further submits that there is specific provision under Section 47 of the Central Goods and Services Act, 2017/State Goods and Services Act, 2017 for levying late fee. Since the petitioner has not filed his return, as such during assessment under Section 73, it was found that the late fee is liable to be levied against the petitioner.
7. Considering the rival submission of the parties and the fact that the petitioner failed to file return during the tax period of 2020-2021 and the respondent authority after issuing show-cause notice to the petitioner has assessed the tax as well as late fee amount under Section 73 read with Section 47 of the Act. Accordingly, we do not find any infirmity in the demand notice, the present writ application, having no merit, is dismissed.
