Case Law Details
R.R. Infratech Vs Assistant Commissioner of Commercial Taxes (Karnataka High Court)
The Karnataka High Court partly allowed a writ petition challenging an adjudication order, recovery notice, and an endorsement denying the petitioner the benefit of the GST Amnesty Scheme 2025 for the tax period 2018-19. The endorsement stated that the petitioner was ineligible for waiver of interest and penalty because it had not uploaded the required declaration before 30 June 2025.
It was undisputed that, after receiving a pre-intimation in Form GST DRC-13, the petitioner had paid part of the tax demand initially and the balance before the adjudication order. The petitioner submitted that it had paid the entire tax demand before 31 March 2025 and would have been eligible for the Amnesty Scheme but for its failure to upload the prescribed declaration by the specified date. The petitioner clarified that its grievance would be resolved if it were permitted to avail the benefit of the Amnesty Scheme by filing the declaration even at this stage.
The petitioner relied on an earlier decision of a Coordinate Bench, which held that the Notification dated 8 October 2024 used the word “may” while prescribing the timeline for filing the declaration. According to that decision, the prescribed timeline was directory and not mandatory. Therefore, the petitioner argued that the authorities should have permitted the delayed filing of the declaration instead of rejecting the request.
The State contended that the petitioner had been informed about the Amnesty Scheme through its registered email address and had failed to avail the benefit despite repeated intimation. It argued that the petitioner could not seek permission to file the declaration after the stipulated date.
The High Court observed that the endorsement rejected the petitioner’s claim solely because the declaration had not been filed within the prescribed time. However, in view of the earlier Coordinate Bench decision holding that the timeline was directory and not mandatory, the respondent authority was required to reconsider the petitioner’s request. The Court held that the authority must examine why the petitioner should not be allowed to file the declaration when the tax demand had crystallized before the notified date and the petitioner claimed to have paid the entire tax.
Accordingly, the Court quashed the endorsement, permitted the petitioner to produce the relevant court orders before the respondent within four weeks, and directed the respondent to reconsider the request for filing the declaration and seeking waiver of interest and penalty. The Court also observed that, while the request remained under consideration, the authorities should not act precipitously in demanding interest or penalty.
Frequently Asked Questions (FAQs)
What was the dispute before the Karnataka High Court?
The dispute concerned the denial of GST Amnesty Scheme benefits on the ground that the required declaration was not filed before 30 June 2025.
Why did the petitioner seek relief from the Court?
The petitioner sought permission to file the declaration after the prescribed date so that it could claim waiver of interest and penalty under the GST Amnesty Scheme.
What was the significance of the word “may” in the notification?
The Court relied on an earlier Coordinate Bench decision holding that the use of the word “may” made the timeline for filing the declaration directory rather than mandatory.
What directions did the High Court issue?
The Court quashed the endorsement, directed the respondent to reconsider the petitioner’s request for filing the declaration, and examine the claim for waiver of interest and penalty.
What did the Court say about recovery proceedings?
The Court observed that while the petitioner’s request for filing the declaration remained under consideration, the authorities should not act precipitously in demanding interest or penalty.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioner has called in question the Adjudication Order dated 29.04.2024 and the Recovery Notice dated 17.04.2026. The Adjudication Order and its Summary are produced as Annexures-A and B, and the Recovery Notice is produced as Annexure-C. The petitioner has also been issued with the Endorsement dated 02.04.2026 vide Annexure-E informing the petitioner that it cannot be allowed waiver of interest and penalty because it has not availed the benefit of GST Amnesty Scheme 2025 [for short, ‘the Amnesty Scheme’] in filing a declaration before 30.06.2025. The proceedings relate to the tax period 2018-2019.
2. Admittedly, when served with a pre-intimation in Form GST DRC 13, the petitioner has offered a part of the demand covered under the impugned Demand Notice and the remaining amount prior to the date of the impugned Adjudication Order. The Amnesty Scheme notified vide the Notification dated 08.10.2024 is amended in terms of the Notification dated 11.02.2025. The petitioner, which has paid the tax demand prior to 31.03.2025, would have been entitled to the benefit of the Amnesty Scheme if it had uploaded a declaration before 30.06.2025 furnishing all the details, but the benefit under the Amnesty Scheme is rejected on the ground that the petitioner has not uploaded the declaration.
3. Sri Pradyumna G.H., the learned counsel for the petitioner, is categorical in stating that though the petitioner has called in question the Adjudication Order and the Recovery Notice the petitioner’s grievance would be addressed if the petitioner is permitted to avail the benefit under the Amnesty Scheme even now; and in elaboration the learned counsel canvasses the following
a. A Co-ordinate Bench of this Court in W.P.No.102773/2026 [T-RES] vide order dated 17.03.2026 has opined that the Notification dated 08.10.2024 employs the expression ‘may’ and therefore the timelines would be directory and not mandatory.
b. If the stipulation on 30.06.2025 is only directory, the authorities could not have issued the Endorsement dated 02.04.2026 and should have permitted the petitioner to upload a declaration furnishing the details of the tax paid and the other details while examining the petitioner’s case for waiver of interest and penalty under the Amnesty Scheme.
4. Sri Hema Kumar K., the learned Additional Government Advocate for the respondents, submits that the petitioner cannot deny the fact that it was informed about the Amnesty Scheme and its entitlement over registered email ID and that it has not availed the benefit despite such repeated intimation and the learned Additional Government Advocate submits that the petitioner having failed to avail the opportunity cannot now contend that he is entitled to file a declaration beyond 30.06.2025.
5. This Court must observe that the Endorsement dated 02.04.2026 informs the petitioner that it is not entitled to the benefit under the Amnesty Scheme because the required declaration was not filed within time despite intimation. However, a Co-ordinate Bench of this Court in W.P.No.102773/2026 [T-RES] has declared that the timelines are not mandatory but directory and that the department has erred in law in strictly interpreting the timelines to upload.
6. This Court is of the considered view that the respondent, who has issued the Endorsement dated 02.04.2026, will have to consider the petitioner’s request in the light of this Court’s afore conclusion and then opine why if the timelines are directory, the petitioner must not be given the benefit of filing a declaration even now when the petitioner asserts that the demand had crystallized before the date notified in the notification and it had offered the tax in full. In the light of the afore, the following:
ORDER
[A] The petition is allowed in-part quashing the respondent’s Endorsement dated 02.04.2026 [Annexure-E] with liberty to the petitioner to file a certified copy of this order and a copy of the order dated 17.04.2026 in W.P.No.102773/2026 within four [4] weeks from the date of receipt of a copy of this order with the respondent.
[B] The respondent is called upon to consider the petitioner’s request to file a declaration now and seek waiver of interest and penalty in the light of the opinion expressed by this Court in WP No.102773/2026 unless this decision has not attained finality.
[C] It is needless to observe that when the petitioner’s request for filing of declaration is now open, the authorities cannot be precipitous in demanding interest or penalty.
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