Kerala HC Upholds Penalty for Failure to Deposit GST Collected Within 30 Days of Notice, Even Tax Has Been Paid

The writ petition is been dismissed by the Hon’ble Kerala High Court in the case of M/s. Global Plasto Wares v. Assistant State Tax Officer [WP (C) No. 33787 of 2023 dated October 17, 2023] and stated that the taxpayer is obligated to file the penalty when the GST collected amount does not get credited to the government even when the GST, as well as the interest, has been filed within 30 days of the notice provided for asking the demand related to the GST non-payment.

Points:

Revenue Department (“the respondent”) has issued a show cause notice to M/s. Global Plasto Wares (“the Petitioner”) asking for the GST payment. The GST amount has been paid by the petitioner that has been asked with the interest vide FORM GST DRC-03 receipt dated March 10, 2022. The Petitioner has furnished a Notice on May 11, 2023 (“the Notice”), for payment of the amount of penalty.

The applicant vide Order on 14th September 2023 (“the Impugned Order”) asking for the penalty amount to get filed via the applicant under Section 73(9) read with Section 73(11) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) and Section 20(xxv) of the Integrated Goods and Services Tax Act, 2017 (“the IGST Act“). Disappointed with the Impugned Order, the applicant has filed a writ petition before the Hon’ble Kerala High Court.

The GST has been filed by the applicant within 30 days from the date of notice the applicant argued. As per Section 73(8) of the CGST Act no penalty is liable to be paid, the applicant mentioned and the notice is considered to be concluded in the cases where the taxpayer under Section 73(1) or Section 73(3) of the CGST Act, has filed the GST that has been asked including interest within 30 days from the notice issuance date.

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Section 73(11) of the CGST Act shall subjected to be applied in the current case the respondent argued since the applicant has collected the GST from the receiver but does not credit the same to the Government and hence under Section 73(9) of the CGST Act the applicant is obligated to file the penalty.

Case:

Whether the taxpayer obligated to file the penalty if the GST amount collected does not get credited to the Government despite if the GST as well as the interest get filed within 30 days of the notice issuance?

Had:

The Hon’ble Kerala High Court in the case of WP(C) No. 33787 of 2023 stated:

• Sees that the major problem that emerges to the court is if the applicant is obligated to file the penalty when the applicant has previously filed the GST amount including the interest within 30 days of obtaining the notice.
• Based on not crediting the GST amount obtained via the supplier from the receiver to the government the demand raised for the payment of GST.
• According to sub-sections 6,8 and 9 of Section 73 of the CGST Act, the applicant is obligated to file the penalty amount a the amount of GST collected via the applicant does not get deposited with the government within thirty days from the last date of GST payment.
• The respondent has obtained the right view and no error of the law has been performed that needs the interference of the court. Therefore the writ petition is dismissed.