Case Law Details
NKR Traders Vs State Tax Officer (Madras High Court)
The Madras High Court, in NKR Traders v. State Tax Officer, held that a general penalty under Section 125 of the respective GST enactments cannot be imposed for non-filing of returns where a specific penalty mechanism in the form of late fee under Section 47 already exists. The petitioner contended that it had already been subjected to late fee liability under Section 47 of the TNGST Act, 2017 for failure to file returns for the Financial Year 2020-21, and therefore, the additional levy of general penalty under Section 125 was impermissible because Section 125 applies only in situations where no separate penalty has been prescribed.
The Court observed that the issue was covered by its earlier decision in Kandan Hardware Mart v. Assistant Commissioner (ST) (FAC). Referring to that judgment, the Court reiterated that where taxpayers are liable to pay late fee under Section 47 of the GST enactments, the imposition of general penalty under Section 125 cannot be sustained because Section 125 operates only in the absence of any other prescribed penalty.
The Court also referred to findings in Kandan Hardware Mart, wherein it had been held that taxpayers who had filed annual returns before 1 April 2023 could not be subjected to late fee exceeding ₹10,000 under each of the respective GST enactments, and that imposition of general penalty under Section 125 in such cases was unsustainable. Even in cases where late fee remained payable, there was no scope for simultaneously levying general penalty under Section 125.
Applying the ratio of the earlier decision, the Court partly allowed the writ petition. It quashed the impugned intimation to the extent it imposed late fee and general penalty exceeding ₹50,000 for Assessment Year 2020-21. The Court specifically held that the levy of general penalty under Section 125 for the relevant assessment year was not sustainable and accordingly set aside the same.
However, the Court clarified that the petitioner remained liable to pay late fee under Section 47 of the respective GST enactments for Assessment Year 2020-21. In view of this conclusion, the Court directed that the attachment of the petitioner’s bank account should be lifted, subject to the petitioner depositing the late fee demanded for the said assessment year. Consequently, the connected miscellaneous petitions were closed without any order as to costs.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Heard both sides.
2. The learned counsel for the petitioner states that for not filing the returns for the Financial Year 2020-2021, the petitioner has already been imposed with the Late Fee penalty under Section 47 of the TNGST Act, 2017 for the year 2020-21. Hence, the first respondent cannot impose the General Penalty under Section 125 of the Act, on the petitioner vide impugned order. Section 125 of the Act applies only where no specific penalty is provided. Hence, the impugned order is liable to be set aside. He further states that the first respondent had already recovered a sum of Rs.2,38,802/- and his bank account has been attached.
3. The issue, however, on merits is prima facie covered by the decision in Kandan Hardware Mart vs. Assistant Commissioner (ST) (FAC) vide order dated 02.01.2026 in W.P. Nos. 27029 of 2023 batch. Therefore, this Writ Petition is disposed of by following the aforesaid decision of this Court wherein it was concluded as under:-
“205. The Division Bench of the Himachal Pradesh High Court in the case of M/s. R.T.Pharma Vs. Union of India and others, while dealing with a similar issue arising out of delay in filing of the “Annual Returns” in GSTR-9 under Section 39 of the respective GST Enactments held that it would be unjust to deny a “Late Fee”, waiver to a taxpayer who filed their Goods and Services Tax (GST) Annual Returns (GSTR-9 and GSTR-9C) before a specific Amnesty Notification was issued in Notification No. 7/2023-Central Tax dated 31.03.2023, and was amended by Notification No. 25/2023-Central Tax dated 17.07.2023.
206. Therefore, the benefit of the above Notifications namely Notification No.7/2023- Central Tax dated 31.03.2023 as amended by Notification No. 25/2023-Central tax dated 17.07.2023 has to be extended to all those Petitioners in Table – 4A who had filed the returns before 01.04.2023.
207. Since these Petitioners are liable to pay “Late Fee”, the question of imposing “General Penalty” under Section 125 of the respective GST Enactments cannot be countenanced in view of the reasons that “General Penalty” under Section 125 of the respective GST Enactments can be imposed only in the absence of ‘any other penalty’ under the respective GST Enactments.
208. It is therefore held that the Petitioners in Table-4A are neither liable for “Late Fee” over and above Rs.10,000/- under each of the respective GST Enactments nor liable for “General Penalty” under Section 125 of the respective GST Enactments.
209. As far as the case of Petitioners in Table-4B namely the Petitioners in W.P.No.19967 of 2023 and W.P.Nos.23356, 30854, 9867 of 2024 and W.P.Nos.47726, 38007, 48941 of 2025 are concerned, they have been subjected to only “Late Fee” under Section 47(2) of the respective GST Enactments. They have not been subjected to “General Penalty” under Section 125 of the respective GST Enactments.
210. Since these Petitioners have also filed the “Annual Returns” before 01.04.2023, they cannot be subjected to “Late Fee” over and above Rs.10,000/- under each of the respective GST Enactments as ordered in the case of those Petitioners in Table-4A.
211. As far as the case of Petitioner in Table-4C namely the Petitioner in W.P.No.3915 of 2024 is concerned, the said Petitioner has filed the “Annual Return” only on 19.01.2024 for the Tax Period 2020-2021. It was within the time under Section 44(2) of the respective GST Enactments as the said date would have expired on 31.12.2024. However, there is no scope for granting any waiver from payment of “Late Fee” under section 47 of the respective GST Enactments, as it was long after the date specified in Section 44(1) of the respective GST Enactments read with Rule 80(1) of the respective GST Rules. The said Petitioner has been imposed with “General Penalty” of Rs.25,000/- each under Section 125 of the respective GST Enactments. There is no scope for imposing “General Penalty” under Section 125 of the respective GST Enactments for the reasons stated for the other Petitioners. Therefore, to that extent W.P.No.3915 of 2024 deserves to be allowed.
212. In the result,
i. W.P.Nos.3540, 3567, 3570, 3902 and 3966 of 2024 as detailed in Table-3 are allowed. Therefore, “General Penalty” imposed under Section 125 of the respective GST Enactments on these Petitioners are set aside.
ii) W.P.Nos.27029, 27032, 27036, 32599, 34352, 34357, 35186 of 2023 and W.P.Nos.3572, 3916, 15690 of 2024 and W.P.Nos.9988, 28786, 42416, 46522 of 2025 as detailed in Table-4A are allowed. Therefore, “General Penalty” imposed under Section 125 of the respective GST Enactments on these Petitioners are set aside. These Petitioners are liable to pay a “Late Fee” of 10,000/- under the respective GST Enactments.
iii) W.P.No.19967 of 2023 and W.P.Nos.23356, 30854, 9867 of 2024 and W.P.Nos.47726, 38007, 48941 of 2025 as detailed in Table-4B are allowed. These Petitioners are liable to pay a “Late Fee” of Rs.10,000/- under the respective GST Enactments.
iv) W.P.No.3915 of 2024 in Table-4C is partly allowed. However, imposition of “General Penalty” under Section 125 of the respective GST Enactments is set aside in view of imposition of “Late Fee” against the Petitioner.
v). No costs. Consequently, all connected Writ Miscellaneous Petitions are closed.”
4. This Writ Petition is, therefore, partly allowed, subject to the following observations:-
(i) Accordingly, the impugned intimation relating to the levy of Late Fee under the respective GST Enactments and the General Penalty under Section 125 of the respective GST Enactments for the Assessment Year 2020–2021 in excess of Rs. 50,000/- is quashed in part.
(ii) The imposition of general penalty under Section 125 of the respective GST enactments for the Assessment Year 2020-2021 is not sustainable in view of the ratio of this Court in Kandan Hardware Mart referred to Accordingly, the imposition of General Penalty under Section 125 of the respective GST enactments shall stand set aside.
(iii) The petitioner is, therefore, liable to pay Late Fee under Section 47 of the respective GST Enactments for the Assessment Year 2020–2021.
5. In view thereof, the attachment of the Petitioner’s bank account shall stand lifted subject to the Petitioner depositing the Late Fee demanded for the Assessment Year 2020-2021. Connected miscellaneous petitions are closed. No costs.
Author Bio
