GST: No 100% Penalty for Show Cause Notices Issued Under Section 73

K.S. Janarthanam Vs Deputy State Tax Officer (Madras High Court)

Introduction: In the case of K.S. Janarthanam v. Deputy State Tax Officer, the Madras High Court addressed the issue of imposing a 100 percent penalty under Section 73 of the TNGST Act. The petitioner, a civil works contractor registered under GST, challenged the penalty imposed on SGST dues despite the issuance of a show cause notice. The Hon’ble Madras High Court disposed of the writ petition, thereby holding that, 100 percent penalty cannot be imposed when Show Cause Notice is issued under Section 73 of Tamil Nadu Goods and Services Act, 2017 (“the TNGST Act”)

Facts:

K.S. Janarthanam (“the Petitioner”) is a civil works contractor registered under GST. The Petitioner received a notice in Form GST-ASMT-10 pertaining to discrepancies in returns filed by the Petitioner. Thereafter, the Petitioner was issued a notice under Section 73 of the TNGST Act. Subsequently, the Revenue Department passed Assessment Order dated September 4, 2023 (“the Impugned Order”) against the Petitioner wherein 100 percent penalty was imposed.

Aggrieved by the Impugned Order, the Petitioner filed a writ petition before the Hon’ble Madras High Court.

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