Omega Slayers Private Limited Vs Commissioner Commercial Tax State (Allahabad High Court)
Summary: The Allahabad High Court quashed the show cause notice and penalty order challenged by Omega Slayers Private Limited concerning its GST return compliance. The petitioner challenged the order dated 5 April 2025, bearing Reference No. ZD0904252017298, passed by the Assistant Commissioner, State Tax, Lucknow Sector-14. The order imposed a general penalty under Section 125 of ₹25,000 under CGST and ₹25,000 under SGST, aggregating to ₹50,000. The petitioner also sought quashing of the consequential Form GST DRC-07 and protection against recovery of the penalty.
In its prayers, the petitioner stated that it had subsequently furnished its GSTR-3B for February 2025, discharged the entire tax liability of ₹50,688 through available input tax credit and paid the applicable late fee. It contended that imposing the maximum general penalty in these circumstances was arbitrary, disproportionate and legally unsustainable.
The Court recorded that the petitioner had already filed its return and paid the late fees in accordance with law. It further observed that the impugned penalty of ₹50,000 exceeded the maximum limit provided under the U.P. GST Act, 2017. On these grounds, it quashed and set aside both the impugned show cause notice and the penalty order and disposed of the writ petition.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Shri Vikas Singh, learned counsel for the petitioner and Shri Sanjay Sarin, learned Additional Chief Standing Counsel appearing on behalf of State.
2. This is a writ petition under Article 226 of the Constitution of India wherein the writ petitioner has prayed for the following substantial relief(s):
“i. Issue a writ, order or direction in the nature of certiorari quashing the impugned Penalty Order dated 05.04.2025 bearing Reference No. ZD0904252017298, passed by the Assistant Commissioner, State Tax, Lucknow Sector-14, whereby a penalty of ₹25,000/-under CGST and 25,000/- under SGST, aggregating to ₹50,000/-, has been imposed upon the petitioner under Section 125 of the CGST/UPGST Act, 2017; Contained in Annexure No.1 to this writ petition, in the interest of justice.
ii. Issue a writ, order or direction in the nature of certiorari quashing the consequential Form GST DRC-07 dated 5.04.2025 bearing Reference No.ZD0904252017298 to the extent it creates the aforesaid penalty liability against the petitioner;
iii. Issue a writ, order or direction in the nature of mandamus directing the respondents not to recover or enforce the impugned penalty of 50,000/- against the petitioner pursuant to the aforesaid impugned order and DRC-07;
iv. Issue an appropriate writ, order or direction holding that, in the facts of the present case, where the petitioner subsequently furnished its GSTR-3B for February, 2025, discharged the entire tax liability of 50,688/- through the available input tax credit and also paid the applicable late fee, the imposition of the maximum general penalty under Section 125 is arbitrary, disproportionate and unsustainable in law.”
3. It is to be noted that the petitioner has already filed his return and has paid the late fees in accordance with law. Further more, the impugned penalty order dated 05.04.2025 is for a sum of Rs.50,000/- which exceeds the maximum limit provided under the U.P. G.S.T. Act, 2017.
4. In light of the same, impugned show cause notice and the impugned penalty order both are quashed and set aside.
5. In the aforesaid terms, the writ petition is disposed of.
