GST Amnesty Waiver Cannot Be Revoked Arbitrarily After Approval: Madras HC

Hayakriva Associates and Builders Vs Deputy Commissioner of CGST and Central Excise (Madras High Court)

Summary: The Madurai Bench of the Madras High Court, in M/s. Hayakriva Associates and Builders Vs Deputy Commissioner of CGST and Central Excise & Another, quashed the order dated 23 December 2025 revoking a waiver earlier granted under Section 128A of the CGST Act, 2017. Justice C. Saravanan remitted the matter to the respondents for a fresh order in accordance with law. The dispute related to FY 2018–19 and arose from belated payment of tax declared in monthly returns and GSTR-3B, together with belated filing of GSTR-3B.

The petitioner challenged the Form GST VOID ORDER bearing Reference No. ZD331225353428F dated 23 December 2025 and sought implementation of Form GST SPL-05 dated 7 August 2025, through which its settlement application had initially been accepted. The judgment records that the impugned order confirmed the proposal in SCN No. 05/2024 (O.C. No. 63/2024) dated 22 January 2024. It was undisputed that proceedings had been initiated under Section 73, rather than Section 74, and that the petitioner had discharged its tax liability before the waiver application was initially allowed.

The Court followed Incompressible Fluid Control System v. Assistant Commissioner, Chennai, (2026) 45 Centax 261 (Mad.). The Revenue’s counsel fairly conceded that the issue was covered against the Department by that decision. The reproduced precedent held that proceedings under Section 73 are essential for a Section 128A application. Direct recovery under Section 79 read with Section 75(12), without invoking Section 73, does not permit such an application; once the Revenue determines liability under Section 73, however, self-assessed tax is not impliedly excluded from the waiver provision.

The reproduced principles further stated that an approval in Form GST SPL-05 cannot be declared void by invoking Section 161 or otherwise, unless the matter falls within Rule 164(16) or (17). Failure to issue an order within Rule 164(13) attracts deemed approval under Rule 164(14), provided the substantive requirements of Section 128A are met. The scope of the statutory waiver cannot be curtailed by Circular No. 238/32/2024-GST, while the time limits prescribed in Rule 164 remain mandatory.

The quoted batch decision distinguished eligible applications rejected merely because they concerned self-assessed tax, including applications initially approved and subsequently declared void, from cases involving late applications, belated payments or no waiver application. It set aside the former category of rejection and void orders but dismissed the identified delayed or unfiled-application matters. Those tables and batch dispositions form part of the precedent reproduced in this order; they are distinct from the present petitioner’s operative relief. Applying the precedent, the Court quashed the impugned order, directed fresh consideration in accordance with law, disposed of the writ petition without costs and closed the connected miscellaneous petition.

Cases Discussed

• Incompressible Fluid Control System v. Assistant Commissioner, Chennai — (2026) 45 Centax 261 (Madras High Court). Followed on eligibility for waiver of self-assessed tax once Section 73 proceedings are invoked, limits on revoking Form GST SPL-05 approval, deemed approval and mandatory procedural timelines. The Revenue conceded that the issue was covered against it.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

Mr. R. Gowri Shankar, learned Senior Central Government Standing Counsel takes notice for the respondents.

2. This Writ Petition is taken up for final hearing at the time of admission with the consent of the learned counsel for the petitioner and the learned Senior Central Government Standing Counsel for the respondents.

3. The petitioner is before this Court challenging the impugned order dated 23.12.2025, whereby the proposal contained in the Show Cause Notice in SCN No. 05/2024 (O.C. No. 63/2024), dated 22.01.2024, has been confirmed for the tax period 2018–19.

4. The dispute arose on account of the belated payment of tax declared in the monthly returns and in GSTR-3B, as well as the belated filing of GSTR-3B. Subsequently, the petitioner opted to settle the dispute under Section 128A of the CGST Act, 2017, which was also accepted by the designated authority on 07.08.2025, with the issuance of Form GST SPL-05. However, the said order was subsequently revoked on 23.12.2025.

5. There is no dispute that the petitioner was proceeded against only under Section 73 and not under Section 74 of the respective GST enactments, 2017. There is also no dispute that the petitioner has discharged the tax liability, pursuant to which the application filed under Section 128A of the CG ST Act, 2017, was initially allowed on 07.08.2025.

6. The issue has now been considered by this Court in Incompressible Fluid Control System v. Assistant Commissioner, Chennai, reported in (2026) 45 Centax 261 (Mad.). The learned Senior Central Government Standing Counsel also fairly concedes that the issue is covered against the Department in view of the said decision of this Court. The conclusions in paragraphs 38 to 40 are reproduced below:

“38. The conclusions that follow from the above discussion and analysis of the relevant provisions may be summarised as under:

(i) The initiation of proceedings under Section 73 of applicable GST enactments is a sine qua non for filing an application for waiver.

(ii) If recovery measures were to be initiated under Section 79 of applicable GST enactments, without invoking Section 73, by relying on Section 75(12), the taxable person cannot file an application under Section 128A. On the other hand, once the revenue decides to determine liability under Section 73, whether in relation to self-assessed tax or otherwise, it is open to the taxable person to file an application under Section 128A.

(iii) Once an order accepting the waiver application is issued in Form GST SPL 05, unless the matter falls within the scope of sub-rule (16) or (17) of Rule 164, it is not open to the GST authorities to issue an order declaring that the earlier approval order is void by reference to Section 161 or otherwise.

(iv) If the order is not issued within the time limit prescribed in sub-rule (13), there shall be deemed approval of the application and conclusion of proceedings in terms of sub-rule (14), provided the substantive conditions stipulated in Section 128A are complied with.

(v) The implied exclusion of cases relating to self- assessed tax cannot be read into Section 128A. The meaning, as gleaned from the text and context, does not warrant such implied exclusion.

(vi) The scope and ambit of Section 128A cannot be curtailed by the issuance of Circular No.238.

(vii) The time limits prescribed in Rule 164 are mandatory.

Adjudication of individual cases

39. The individual cases forming part of this batch are required to be decided in light of the above principles. These cases fall into distinct categories. The first category, which is the largest, consists of cases wherein the taxable person concerned otherwise fulfilled all the requirements of Section 128A and Rule 164, but the waiver application was rejected on the ground that such application pertained to self-assessed tax arising out of belated filing of GSTR 3B returns. As will be noticeable, the reason for rejection is couched in some cases as ineligibility for waiver of interest. This is merely another way of framing rejection of waiver applications in relation to self-assessed tax. In some of these cases, the rejection orders were issued beyond the time limit prescribed in sub-rule (13). All these rejections are untenable and liable to be set aside for reasons discussed earlier. The particulars of these cases are set out below in a table

40. A second category, which is closely related to the first category, consists of cases wherein the waiver applications were initially allowed by issuing an order in Form GST SPL – 05. Subsequently, an order declaring the earlier order to be void was issued. These orders are also invalid for reasons discussed earlier and are liable to be set aside. The particulars of these cases are set out below:

41. A third category consists of cases where the application for waiver was filed belatedly or the payment was made belatedly. Since both these requirements are essential, these rejections are in order and no interference is warranted. The particulars of said cases are set out below:

Cases where the application for waiver was filed belatedly

Belated Payment

42. In W.P.No.11327 of 2026, the petitioner asserts that he was unaware of the order under Section 73 until the attachment order was issued. This is a case wherein no application for waiver has been filed as on date. In W.P.No.38025 of 2025, after filing a waiver application belatedly on 01.08.2025, the petitioner has requested for a Mandamus to direct the consideration thereof. Based on conclusions drawn earlier, these writ petitions are liable to be dismissed.

43. In conclusion, these writ petitions are disposed of on the following terms:

(a) W.P. Nos. 11409 of 2026, 1311 of 2026, 1317 of 2026, 1320 of 2026, 44260 of 2026, 44263 of 2025, 6199 of 2026, 6246 of 2026, 6259 of 2026, 6230 of 2026, 44261 of 2026, 12838 of 2026, 38101 of 2025, 38105 of 2025, 26587 of 2026, 26393 of 2026, 44253 of 2026, 7928 of 2026, 23886 of 2026 & 6028 of 2026 are allowed by setting aside the respective order of rejection of the waiver application or the void order, as the case may be, and holding that the respective petitioner is entitled to a waiver in terms of Section 128A. Where applicable, any consequential orders issued pursuant to orders declaring the approval order in Form GST SPL – 05 to be void are set aside.

(b) W.P. Nos. 9766 of 2026, 21378 of 2026, 16441 of 2026, 22085 of 2026, 22087 of 2026 and 22688 of 2026 are dismissed.

(c) W.P. No.38025 of 2025 is dismissed.

(d) W.P.No.11327 of 2026 is also dismissed.

(e) Consequently, connected miscellaneous petitions are closed. No costs.”

7. In view of the above, the impugned order is quashed and the case is remitted back to the respondents to pass a fresh order in accordance with law.

8. Accordingly, this Writ Petition stands disposed of. No costs. Consequently, connected miscellaneous petition is closed.