G.P. Construction Vs Commissioner (Madras High Court)
Madras High Court confirms interest on delayed GST remittances for G.P. Construction, allows appeal against penalty imposition.
Chennai, Tamil Nadu – The Madras High Court has disposed of a writ petition filed by G.P. Construction, addressing demands for late fees, interest, and penalties related to delayed Goods and Services Tax (GST) remittances. The court affirmed the levy of interest under Section 50(1) of the Central Goods and Services Tax (CGST) Act, 2017, and the Tamil Nadu Goods and Services Tax (TNGST) Act, 2017, but provided a pathway for the petitioner to challenge the imposed penalty.
The writ petition contested an Order-in-Original dated February 12, 2025, which followed show cause notices issued on September 3, 2024, and November 25, 2024. The impugned order confirmed several financial demands against G.P. Construction.
Specifically, the order confirmed a late fee of Rs. 13,630 (CGST: Rs. 6,815; SGST: Rs. 6,815) for delayed filing of GSTR-3B returns, as per Section 47(1) of the CGST/TNGST Act, 2017. An additional late fee of Rs. 50,910 (CGST: Rs. 25,455; SGST: Rs. 25,455) was confirmed for delayed filing of GSTR-1 returns, also under Section 47(1).
A significant component of the demand was interest amounting to Rs. 11,82,520 (CGST: Rs. 5,91,260; SGST: Rs. 5,91,260) on a delayed tax payment of Rs. 57,20,514. This interest was levied under Section 50(1) of the CGST/TNGST Act, 2017, read with Rule 88B of the CGST Rules, 2017. Furthermore, a penalty of Rs. 5,72,052 (CGST: Rs. 2,86,026; SGST: Rs. 2,86,026) was imposed under Section 73(9) read with Section 122(2)(a) of the respective GST Acts. It was noted that an initial demand of Rs. 2,450 towards ineligible Input Tax Credit (ITC) was dropped as the supplier had filed the GSTR-3B return and paid the tax.
