Case Laws| GST: Where order under section 73 was passed and petitioner applied for rectification admitting tax liabilities of CGST and SGST, requested for relief from penalty as 100% penalty was imposed on SGST, since notice was issued under section 73 and not under section 74 of TNGST Act, impugned order was to be quashed as regards imposition of penalty at 100% on SGST dues
[2024] 159 taxmann.com 329 (Madras)
HIGH COURT OF MADRAS
K.S.Janarthanam
v.
Deputy State Tax Officer
SENTHILKUMAR RAMAMOORTHY, J.
W.P. NO.1848 OF 2024
W.M.P. NOS. 1921 AND 1922 OF 2024
JANUARY 31, 2024
Determination of tax not paid or short paid, etc for reason other than fraud, etc. -Hundred per cent penalty on State tax – Petitioner received a notice under section 73 of TNGST Act and assessment order thereafter -Petitioner applied for rectification wherein petitioner admitted its tax liabilities of CGST and SGST and requested for relief from penalty – Petitioner pointed out that 100% penalty was imposed although show cause notice was issued under section 73 – Respondent submitted that impugned order came to be issued in view of rectification application of petitioner –
HELD: Notices were issued under section 73 and not under section 74 of TNGST Act, therefore, impugned order called for interference as regards imposition of penalty at 100% on SGST dues – Accordingly, impugned order was to be quashed only insofar as it pertained to imposition of penalty under two heads [Section 73, read with section 74 of Central Goods and Services Tax Act, 2017/Tamil Nadu Goods and Services Tax Act, 2017] [Paras 4 to 6] [In favour of assessee/ Matter remanded]
This judgment serves as a significant precedent, providing clarity on the interpretation and application of penalty provisions in similar cases. It underscores the need for authorities to exercise discretion judiciously and fairly when imposing penalties, and it reinforces the rights of taxpayers to challenge arbitrary or unjust penalties through legal recourse. Overall, the High Court’s ruling in favour of the assessee highlights the importance of a robust legal system in safeguarding individual rights and ensuring the proper administration of justice in matters of taxation and regulation. – JSPCO
