The Madras High Court has upheld the levy of late fee and penalty on a GST-registered taxpayer for failure to file the annual return in Form GSTR-9, ruling that Section 47(2) of the GST law specifically authorizes the imposition of late fee for continued non-filing of annual returns.
The bench of Justice Senthilkumar Ramamoorthy examined Section 47(2) of the CGST Act, 2017, which provides that any registered person who fails to furnish the annual return required under Section 44 by the due date shall be liable to pay a late fee of ₹100 per day for the period during which the failure continues, subject to the prescribed maximum limit.
The bench also held that a separate penalty under Section 125 of the GST enactments can be imposed where no specific penalty is otherwise prescribed for such contravention.
The case arose from a writ petition filed before the Madras High Court challenging an order dated December 13, 2023, issued under Section 73 of the Tamil Nadu Goods and Services Tax (TNGST) Act, 2017. The impugned order imposed both late fee and penalty on the taxpayer for failure to file the annual return in Form GSTR-9 for the financial year 2017-18.
The petitioner sought quashing of the order, contending that the levy of late fee and penalty was contrary to law.
The petitioner argued that the statutory time limit for filing an annual return is three years from the due date prescribed for furnishing such return. It was submitted that for FY 2017-18, a notification had fixed the due date as February 5, 2026, and therefore the relevant period expired in February 2023.
The taxpayer further contended that the impugned order incorrectly recorded that the annual return had been filed on December 7, 2022. According to the petitioner, a late fee can be levied only when a return is filed belatedly and not in cases where the return has not been filed at all.
In addition, the petitioner argued that once a late fee had been imposed, a separate penalty under Section 125 of the GST enactments could not be levied for the same default.
The Court observed that the language of Section 47(2) clearly covers situations where a registered person fails to file the annual return by the due date and does not restrict the levy of late fee only to delayed filing cases.
The High Court also considered the challenge to the penalty imposed under Section 125 of the GST statutes. The provision authorizes imposition of a penalty of up to ₹25,000 for contravention of GST provisions where no separate penalty has been specifically prescribed.
After examining the statutory framework, the Court noted that no specific penalty had been prescribed for failure to file the annual return. Consequently, the authorities were justified in invoking Section 125 and imposing a general penalty in addition to the late fee.
Rejecting the taxpayer’s submissions, the Court held that section 47(2) expressly enables levy of late fee when a taxpayer fails to file the annual return by the due date. The contention that late fee can be imposed only for belated filing and not for non-filing is untenable. Since no separate penalty is prescribed for failure to furnish the annual return, penalty under Section 125 can validly be imposed.
The Court concluded that there was no infirmity in the impugned order warranting interference under Article 226 of the Constitution of India.
Holding that both the late fee and penalty were legally sustainable, the Madras High Court dismissed the writ petition and closed the connected miscellaneous petitions.
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