The Kerala High Court upholds the penalty for failing to deposit GST collected within 30 days of notice even when the tax has been paid

Title: M/s. Global Plasto Wears v. Assistant Tax Officer
Decided on: 17 October, 2023

+ WP (C) No. 33787 of 2023

CORAM: HON’BLE Mr. Justice Dinesh Kumar Singh

The Hon’ble Kerala High Court dismissed the writ petition, ruling that the taxpayer must file a penalty when the amount of GST collected is not credited to the government, even if the GST and interest are filed within 30 days of the notice provided for the demand related to the GST non-payment.

Facts of the Case

The Revenue Department issued a Show Cause Notice to M/s. Global Plasto Wares on February 28, 2022, requesting that they pay the GST. In accordance with the FORM GST DRC-03 receipt dated March 10, 2022, the petitioner paid the whole amount of GST requested plus interest. A notice dated May 11, 2023, requesting payment of the penalty amount was sent to the petitioner. By order dated September 14, 2023, the petitioner requested the amount of the penalty to be paid in accordance with Sections 20(xxv) of the Integrated Goods and Services Tax Act, 2017 and Sections 73(9) read with Section 73(11) of the Central Goods and Services Tax Act, 2017. The Petitioner, aggrieved by the impugned order, filed a writ petition with the Hon’ble Kerala High Court.

Courts analysis and decision

The Hon’ble Kerala High Court observed that the primary question on the table, is whether the petitioner must pay the penalty even though they have previously paid the GST amount and interest within 30 days of getting the notice. It should be noted that the demand for GST payment was made because the supplier had not credited the government with the full amount of GST that the provider had received from the receiver. concluded that the petitioner is responsible for paying the penalty under Section 73 of the CGST Act since the amount of GST collected by the petitioner has not been deposited with the government within 30 days of the GST payment deadline. The Hon’ble court held that the Respondent has adopted the correct stance, and there hasn’t been any legal error that calls for the court to get involved. The writ petition is therefore denied.

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Written by- Hargunn Kaur Makhija

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