An Analysis of Court Cases on Belated GST Return Filing

The Indian government enacted the Goods and Services Tax Act on March 29, 2017, which took effect on July 1 of the same year. This act stands as the singular domestic indirect tax law applicable across the country, known as the Goods and Services Tax (GST).

GST is a comprehensive tax imposed on both goods and services in India, replacing several other indirect taxes such as VAT, service tax, and excise duty. This transition aims to enhance operational efficiency, reduce the possibility of double taxation, and streamline tax collection processes.

Fortunately, under the GST law, there are no penalties for late or non-filed GST returns. Instead of a penalty, a GST-registered dealer is responsible for late fees in the event of delayed return filing. Additional late fees must be paid by debiting the electronic cash ledger, as Input Tax Credit (ITC) cannot be utilized to cover these fees.

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Madras HC: GST Registration Cancellation Case B/W Rakesh Kumar vs Assistant Commissioner

The Madras High Court directed a petitioner to file an appeal under the Tamil Nadu Goods and Service Tax (TNGST Act), 2017 after their GST registration was revoked due to non-filing of returns. The petitioner argued they had submitted a return, although lacking evidence to prove that the GST department cancelled the registration.

Justice C. Saravanan, presiding over a single-judge bench, noted that the petitioner was involved in dealing with automobile spare parts. The petitioner claimed to have filed a return on 17.02.2023, yet there were no supporting records. Despite this, the Court inclined to grant the petitioner the opportunity to pursue an appellate remedy before the Appellate Commissioner under Section 107 of the TNGST Act, 2017, within 30 days.

Orissa HC: Common GST Portal & Delayed Filing Case B/W Sourav Satapathy vs Commissioner of CT & GST

Meanwhile, the Orissa High Court declined to send the matter back to the Assessing Officer for reassessment, citing an alternative and effective remedy available to the petitioner. This decision was made due to the assessee’s failure to register on the common Goods and Services Tax (GST) Portal within the statutory time limit.

Additionally, apart from the failure to enrol, the appellant also missed the deadline for filing the appeal. In a writ petition aiming to annul the demand raised by the authority under Annexures 7 and 8 series, considering payment made through statutory return form GSTR-3B under Annexure-5 series.

The Division Bench of Justice B R Sarangi and Justice M S Raman dismissed the petition. The assessment order clearly stated that the petitioner received a provisional ID for enrollment on the common portal but failed to complete the enrollment process.

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Madras HC: GST Registration Canceled Due to Health Issues Case B/W Sri Sastha Canteen vs Commissioner of GST & Central Excise

In a separate case at the Madras High Court, an assessee was permitted to file a GST return after their GST registration was cancelled due to health issues preventing the filing of the return.

The court ordered the petitioners to pay GST and file returns for the period after the registration cancellation. They must declare the accurate value of supplies and pay GST in cash. Utilization of any earned Input Tax Credit will only be permitted after examination and approval by the respondents or any other competent authority. The judgment by Justice P T Asha highlighted that the benefit previously extended in the case of Suguna Cutpiece Centre should also be extended to the petitioner.

Madras HC: Belated Filing of GSTR-1 & GSTR-3B Case B/W Raj Kishore Engineering Construction (P) Ltd vs The Joint Commissioner

Recently, a Single Bench at the Madras High Court overturned the decision to cancel the GST Registration of Raj Kishore Engineering Construction Pvt Ltd due to the absence of a Goods and Services Tax Appellate Tribunal. The case was sent back to the First Appellate Authority for reconsideration.

Read Also: All About GST New Rule 88C for Mismatch GSTR-1 vs GSTR-3B

Justice M Sundar, presiding over the Single Bench, noted, “The Appellate Authority should have provided specific reasoning on this matter. They should have examined the reasons presented by the petitioner – the taxpayer – regarding the delayed filing of returns and should have arrived at a conclusion.” Consequently, the impugned order was set aside, and the matter was referred back to the appellate authority to re-evaluate it based on legal considerations.

Orissa HC: Modifications to the Portal Case B/W Durga Raman Patnaik Vs Additional Commissioner of GST

In a separate instance, a division bench of the Orissa High Court permitted taxpayers to file GST returns before the registration was cancelled and directed the Government to make necessary modifications to the portal.

Granting relief to the assessee, the Court ruled that the petitioner could submit returns for the period preceding the registration cancellation if such returns hadn’t been filed previously. This should include unpaid taxes before cancellation, along with interest and statutory payments for the delayed GST payments and fee fixed for late return filings for the defaulted period under the Act. This filing should be completed within sixty days from the date of receiving a copy of the judgment if not already paid.

Madras HC: Return Filing Permitted Case B/W M.Mallika Mahal vs The Commissioner of Central GST & Central Excise

In a significant judgment, the Madras High Court allowed businesses to file returns for the period before the cancellation of their GST Registration and make the necessary tax payments along with interest. The Single Judge, reaffirming an earlier order from January 31 of the same year, also urged the State to instruct GSTN (Goods and Services Tax Network) to facilitate the required changes in the portal.

Justice Anita Sumanth addressed a group of writ petitions where the petitioners had missed several opportunities given to them after the cancellation of their registrations. These opportunities were provided through Amnesty Schemes, granting extensions for dealers to take steps to restore their registrations that were cancelled.

Madras HC: GST Levy on Belated Cash Payments Case B/W M/s.Refex Industries Limited Vs The Assistant Commissioner

While permitting the Writ Petition, the Madras High Court retains that the GST Department can impose interest merely on the cash part of the tax remitted belatedly and not on the available ITC.

The bench has made the ruling composed of member Dr Justice Anita Sumanth in the case of M/s.Refex Industries Limited Vs. The Assistant Commissioner of CGST & Central Excise.

The Court noted that Section 50(1) of the CGST Act, effective from 01.08.2019, specifies that interest should be imposed only on the cash portion of the tax payment, aiming to rectify an anomaly in the pre-existing provision. This interpretation should be considered clarificatory and retrospectively operative.

Madras HC: Incorrect Use of ITC Case B/W Ramakrishnan Mahalingam vs State Tax Officer

Regarding the denial of the revocation of GST Registration based on the alleged incorrect use of Input Tax Credit (ITC), the Madras High Court ruled that the authorities cannot prohibit it. Ramakrishnan Mahalingam, the petitioner, received a GST Registration Certificate dated August 02, 2018, retroactively effective from July 1, 2017. A Show Cause Notice from the State Tax Officer, GST, dated July 22, 2019, was issued to the petitioner, citing the non-filing of returns for six consecutive months. Subsequently, the petitioner’s GST registration was cancelled on September 16, 2019.

Therefore, as these are the sole conditions required for the petitioner to meet for the revocation of registration, the court deemed the cancellation of registration in this instance to be incorrect and improper.

Jharkhand HC: GSTR-3B Interest Demand Delay Case B/W R.K. Transport Private Limited, Phusro, Bokaro Vs The Union of India

A two-judge panel of the Jharkhand High Court, including Justices Aparesh Kumar Singh and Deepak Roshan, invalidated the interest demand due to delayed filing of GSTR-3B. They cited the lack of appropriate adjudication proceedings initiated by the GST department to confirm such demands as the reason for their decision.

“The demand mentioned in letters dated 28th February 2020 / 2nd March 2020 (Annexure-4) is hereby nullified in consideration of the discussions held above and for the reasons outlined. The authorities are granted the freedom to commence suitable adjudication proceedings to establish the petitioner-assessee’s interest liability under the relevant provisions of Section 73 or 74 of the CGST Act, as per the law, following an opportunity for the petitioner to be heard,” ruled the bench.

R.K. Transport Private Limited, Phusro, Bokaro Vs The Union of India through the Principal Commissioner, Central Goods and Services Tax and Central Excise, Ranchi.

Delhi HC: Fines for Late Filing of GST Return Case B/W Ishwar Chand Proprietor Vs Union of India & ORS

In a recent judgment, the division bench of Delhi High Court, led by Justices Vibhu Bakhru and Amit Mahajan, noted that the petitioner cannot be held accountable for failing to file returns during the period when their registration was cancelled, starting from the date the petitioner applied for the revocation of the cancellation.

The case at hand revolves around the imposition of fines for late filing of GST returns during the period when the petitioner’s ability to file was affected by the revoked GSTIN registration. The bench stated that the rejection of the GSTIN registration application by the respondent authority lacks a valid reason, rendering the decision unsustainable.

Andhra Pradesh HC: ITC Time Limit Filing Case B/W Thirumalakonda Plywoods vs Assistant Commissioner

In a recent decision, the Andhra Pradesh High Court ruled that the time limit for filing Input Tax Credit (ITC) under the Andhra Pradesh General Sales Tax Act, 2017 (APGST Act) is not in violation of the Constitution of India. The mere acceptance of Form GSTR-3B returns does not excuse delays in filing for Input tax credit.

A Division Bench, comprised of Justices U Durga Prasad Rao and T Mallikarjuna Rao, affirmed that the time limit prescribed for claiming ITC under Section 16(4) of APGST Act/CGST Act, 2017 does not breach Articles 14, 19(1)(g), and 300-A of the Constitution of India. The court clarified that Section 16(2) of APGST/CGST Act, 2017 does not supersede Section 16(4) and both operate independently without contradicting each other.

Moreover, the Court emphasized that merely accepting Form GSTR-3B returns with late fees does not absolve the delay in claiming ITC beyond the specified period under Section 16(4) of APGST/CGST Act, 2017.

Uttarakhand HC: Non-filing of Returns Case B/W Anand Prasad GSTIN Vs. Commissioner, State Goods and Services Tax

In a recent ruling by Justice Manoj Kumar Tiwari in a single bench, the court-mandated the petitioner to clear their remaining Goods and Services Tax (GST) dues.

The state counsel informed the court that the petitioner’s GST registration had been revoked due to a failure to file returns for six months.

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Madras HC: Relief to Assessee on GST Registration Cancellation Case B/W Tvl.Marimuthu Venkateshwaran vs Commissioner

Justice Mohammed Shaffiq, presiding in a Single Bench, emphasized the consistent adherence of the court to directives, citing the Tvl. Suguna Cutpiece case. Notably, no appeals have been lodged by the Revenue or Department against this view, indicating their acceptance of the court’s stance. Consequently, the court expressed its intention to continue following its prior order in this regard.