Tvl. Sri Annai Agro Foods vs. The Assistant Commissioner (St) -Ii

Held

The Court held that the general penalty of Rs. 50,000/- imposed on the petitioner was not correct, referencing a previous order of the Court dated 04.02.2025 in W.P.No.36614 of 2024, which had set aside a similar penalty. Therefore, the impugned assessment order and summary order were quashed to the extent of this general penalty. Regarding the late fee, the Court noted that the petitioner's submission that it was not collected in accordance with Section 47(2) of the GST Act was acceded to by the respondent. Consequently, the imposition of late fee was set aside, and the matter was remanded back to the respondent for fresh consideration on this specific issue. The Court also directed the lifting of the attachment made on the petitioner's bank account, as the impugned order imposing the penalty and late fee was set aside.

Facts

The petitioner, Tvl. Sri Annai Agro Foods, represented by its partner K. Selvaganesh, filed a writ petition challenging an order dated 28.05.2025 and a Form GST DRC-07 dated 29.05.2025 issued by the respondent, the Assistant Commissioner (ST)-II, Virudhunagar. The challenge was primarily against the levy of late fee and penalty for the delay in filing the annual return for the financial year 2021-22. The petitioner contended that the general penalty imposed was incorrect and that the late fee was calculated at a rate higher than prescribed by law. The respondent's counsel fairly acceded to the petitioner's submissions.

Key Issues

1. Whether the general penalty of Rs. 50,000/- imposed for the delay in filing the annual return for the financial year 2021-22 is legally sustainable, considering the petitioner's reliance on a previous High Court order (W.P.No.36614 of 2024)? 2. Whether the late fee collected for the delay in filing the annual return for the financial year 2021-22 is in accordance with the provisions of Section 47(2) of the GST Act, 2017, which mandates a maximum late fee of 0.25% of the total turnover, when the respondent allegedly collected 0.75%? Petitioner's Arguments: The petitioner argued that the general penalty of Rs. 50,000/- was incorrect and had been set aside by this Court in a previous order. Regarding the late fee, the petitioner contended that Section 47(2) of the GST Act limits the late fee to Rs. 100/- per day, capped at 0.25% of the total turnover, and that the respondent had wrongly collected 0.75% of the annual turnover, demonstrating a non-application of mind. Respondent's Arguments: The learned Additional Government Pleader for the respondent fairly acceded to the submissions made by the petitioner.