Sriba Nirman Company Vs Commissioner (Appeals) (Andhra Pradesh High Court)
In Sriba Nirman Company vs. Commissioner (Appeals), the Andhra Pradesh High Court addressed the invocation of Section 74 of the CGST Act regarding non-filing of returns and non-payment of taxes by the petitioner. The petitioner argued that penalties were unjust as they had not committed fraud or willfully suppressed facts. The case delved into the interpretation of Section 74, which mandates proof of fraud, willful misstatement, or suppression of facts to evade tax for penalties to apply.
Also Read SC Judgment in this case: SC Upholds GST Penalty for Wilful Non-Filing of Monthly Returns
The petitioner contended that non-payment of taxes occurred due to financial constraints stemming from unpaid dues by their client. However, the appellate authority found that partial payments had been received, leaving no impediment for remitting taxes. The petitioner also claimed that they had time to file annual returns, but the court clarified that monthly GST returns (GSTR-3B) must be filed as per Sections 37–39 of the CGST Act, rendering this argument invalid.
Relying on judicial precedents, including Northern Operating Systems Pvt. Ltd. (Instruction No. 5/2023-GST), the court reiterated that non-payment of taxes alone does not constitute fraud or willful suppression. There must be clear evidence of intent. Additionally, the court emphasized that penalties under Section 74 can be reduced if taxpayers voluntarily comply with provisions under Section 74(5) and 74(8). In this case, the petitioner failed to meet these requirements as interest and penalties were not paid within stipulated timeframes.
