Akshaya Borewells Vs Assistant Commissioner of Central Tax and Central Excise (Karnataka High Court)
The Karnataka High Court allowed the writ petition filed by Akshaya Borewells challenging rejection of its waiver application under Section 128A of the CGST Act. The petitioner, engaged in drilling bore wells, was subjected to GST audit for the period July 2017 to March 2020. The audit found that common input tax credit had been used for taxable as well as exempt supplies, resulting in reversal liability of Rs.41,91,146/-. The petitioner accepted the audit observations and paid the amount through DRC-03 on 23.06.2023. Thereafter, a show cause notice under Section 73 was issued and an Order-in-Original dated 28.12.2023 confirmed interest liability of Rs.30,64,745/- under Section 50(1).
Subsequently, Section 128A was introduced with effect from 01.11.2024 to provide waiver of interest and penalty relating to demands under Section 73 for FYs 2017-18 to 2019-20. Notification No.21/2024 dated 08.10.2024 prescribed 31.03.2025 as the date before which full payment of tax was required to avail the benefit. The petitioner claimed that it was under a bona fide impression that proceedings had been dropped since tax dues were already paid. Upon learning about the order, the petitioner filed a waiver application in Form GST SPL-02 on 18.07.2025.
