M/S Balaji International vs. The State Of Bihar

Held

The Court held that the contention of the petitioner that issuance of notice under Section 46 is a sine qua non for imposition of late fee under Section 47 is preposterous. Section 47 clearly states that a registered person failing to furnish returns by the due date shall pay late fee. The due date is known to every registered dealer, and the liability to pay late fee arises automatically upon non-filing by the due date. The respondent authority can proceed to impose late fee when the return is not filed within the due date. Regarding the argument that proceedings were initiated under wrong provisions, the Court referred to Section 160 of the GST Act, which states that assessment or other proceedings shall not be invalidated by reason of any mistake, defect, or omission if the order is in substance and effect in conformity with the intents and requirements of the Act. The Court found that the impugned order, in substance and intent, imposes late fee for non-filing of the statutory return within the due or extended dates, which constitutes gross negligence and attracts Section 47. This cannot be considered a minor mistake, and therefore, the benefit of Section 126 cannot be granted. The Court found no infirmity in the impugned order.

Facts

The petitioner, M/s Balaji International, a sole proprietorship, filed a writ petition challenging an order dated 22.04.2024, passed by the Deputy Commissioner of State Tax under Section 73(9) of the GST Act, 2016. This order imposed a late fee of Rs. 1,70,566 for the financial year 2018-19 for non-filing of the annual return (GSTR-9). The petitioner argued that the proceedings were initiated under incorrect provisions and sought the benefit of Section 126 of the GST Act. The petitioner is engaged in the sale and supply of rice, wheat, and paddy, which are non-taxable supplies. The dispute pertains to the financial year 2018-19, for which the due date for filing the annual return was extended multiple times by government notifications, ultimately till 31.12.2020. A subsequent amnesty scheme was also available from 01.04.2023 to 30.06.2023 for waiving late fees. The petitioner attempted to file the return in 2024 but was informed by the portal that filing was not permitted after the expiry of three years from the due date.

Key Issues

1. Whether the initiation of proceedings under Section 73(9) of the GST Act, instead of Section 46 and 47, for imposing late fee for non-filing of GSTR-9 vitiates the impugned order? - Petitioner's argument: The respondent authorities proceeded under wrong provisions of law, as issuance of notice under Section 46 is a pre-condition for initiating proceedings under Section 47 for imposing late fee. The initiation of proceedings under Section 73(9) instead of Section 46 and 47 renders the entire order invalid. - Revenue's argument: Merely quoting the wrong section does not vitiate the order if, in substance, it conforms to the intent of the Act. The order, though quoting Section 73(9), was passed in terms of Section 47, imposing a fixed and mandatory late fee. 2. Whether the petitioner is entitled to the benefit of Section 126 of the GST Act, which exempts penalties for minor breaches of tax regulations or procedural requirements? - Petitioner's argument: The petitioner's case involves a minor breach as the amount of tax involved is zero, and the omission is easily rectifiable. Therefore, the benefit of Section 126 should be granted. - Revenue's argument: The petitioner's failure to file the return within the extended due dates and the amnesty period amounts to gross negligence, disentitling them from the benefit of Section 126. The late fee is a fixed and mandatory penalty.