Kerala HC Upholds GST Penalty U/S 74, Cites Delay and No Jurisdictional Error

The High Court of Kerala has rejected a legal request that questioned a penalty under section 74 of the CGST Act, 2017. This penalty was given under a specific section of the laws governing GST. The court observed that the reasons provided by the petitioner, such as delays and issues with authority, were not valid enough to challenge the decision.

The applicant-taxpayer, TABASCO HINDUSTAN INFRA DEVELOPERS PRIVATE LIMITED, was involved in making residential apartments and commercial complexes. An SCN was issued u/s 74(1), and the department passed the impugned order dated 27.09.2023, asking for Rs 30,42,916 as tax and an equal amount as penalty.

The applicant has filed the tax though did not file the penalty, and also did not submit an appeal. The applicant, after more than 17 months, has submitted a writ petition contesting the penalty part of an order (Ext.P1).

The Kerala High Court heard the applicant’s counsel, Sri. Rajesh Nambiar, Senior Government Pleader, Dr. Thushara James, and standing counsel Sri. V. Girish Kumar.

Under Article 226 of the Constitution, it is marked that once the time limit to file a plea lapses, the applicant does not ask for relief. The court can intervene merely in rare cases in which the order does not have jurisdiction or breaches natural justice, which was not the case here.

A single-member bench of Bechu Kurian Thomas(Judge) noted that the applicant had accepted the order by filing the tax and chose not to file an appeal within the given time u/s 107 of the CGST Act. Hence, there was no reason to interfere under Article 226. The writ petition was dismissed.