Global Infonetwork Vs Superintendent of Central GST and Central Excise (Madras High Court)
Summary: M/s. GLOBAL INFONETWORK, through its proprietor Chelliah Sam Jebarajan, approached the Madras High Court under Article 226 of the Constitution of India challenging Order in Original No. 14/2025-GST-(Supdt-R-2) dated 14.02.2025 passed by the Superintendent of Central GST and Central Excise, Range II, Porur Division, Chennai South Commissionerate. The impugned order concerned short payment of GST arising from the comparison of GSTR-3B with GSTR-1 for the period from May 2020 to October 2020 and confirmed applicable interest, penalty and late fee. The prayer, as recorded in the order, sought interference insofar as the demand related to interest, penalty and late fee. At the hearing, however, the Court recorded that the order dated 14.02.2025 was assailed insofar as imposition of penalty was concerned. The petitioner submitted that the proceedings related to the assessment period 2020–2021, which was the COVID-19 pandemic period, and that there had consequently been a delay in remitting taxes under GSTR 3B. The respondent accepted notice through learned Senior Standing Counsel and defended the impugned order. It was submitted on behalf of the Revenue that the 10% penalty had been imposed under Section 73(1) and that interest had been imposed in terms of Section 50(1) of the CGST Act. The Court considered the statutory position concerning waiver of penalty and observed that, except in cases where tax and interest are paid within thirty days from the date of receipt of the show cause notice, the statute does not enable waiver of penalty at 10% of the tax. The Court recorded that penalty had been imposed at 10% of the tax demand and quantified the relevant tax demand at Rs.7,14,322/-. On that basis, the Court found no infirmity in the impugned order warranting interference. The writ petition was accordingly disposed of without any order as to costs. The connected miscellaneous petition was consequently closed. The order therefore declined to interfere with the penalty imposed under the statutory framework in respect of the delayed remittance during the assessment period 2020–2021, while the Court’s recorded reasoning specifically addressed the penalty component and did not set aside the impugned order.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order dated 14.02.2025 is assailed insofar as imposition of penalty is concerned.
2. Learned counsel for the petitioner submits that the proceedings pertain to the assessment period 2020 – 2021, which was the COVID-19 pandemic period. As a result, he submits that there was a delay in remitting taxes under GSTR 3B.
3. Mr. M. Santhanaraman, learned Senior Standing Counsel, accepts notice for the respondent. He submits that 10% penalty was imposed under Section 73(1) and that interest was imposed in terms of Section 50(1). Therefore, he contends that there is no infirmity in the impugned order.
4. Except in cases where tax and interest are paid within thirty days from the date of receipt of show cause notice, the statute does not enable waiver of penalty at 10% of the tax. Penalty has been imposed at 10% of the tax demand of Rs.7,14,322/-. Therefore, I find no infirmity in the order warranting interference. By recording the same, this writ petition is disposed of without any order as to costs. Consequently, connected miscellaneous petition is closed.
