Delay in Section 128A Waiver Application Not a Bar | HC

Case Details: Sri Laxmi Borewell Agencies vs. Assistant Commissioner of Central Tax - [2026] 186 taxmann.com 453 (Karnataka)

Judiciary and Counsel Details

• Ms Jyoti M., J.
• Shashank Hegde & Josheph Vargees, Advs. for the Petitioner.
• Sourabha A. Mirje & Shivaraj S. Balloli, Advs. for the Respondent.

Facts of the Case

The petitioner, a GST-registered works contractor engaged in drilling bore wells, underwent a departmental audit that identified a common input tax credit (ITC) liable for reversal. It subsequently paid the said ITC via Form GST DRC-03 but did not pay the interest liability, leading to the issuance of a Show Cause Notice (SCN) and a subsequent order-in-original confirming the interest liability, which the petitioner claimed was neither received nor uploaded online. The petitioner filed the waiver application in Form GST SPL-02, which was subsequently rejected by the authority via Form GST SPL-07 solely on the ground of delay beyond the three months. The rejection was challenged by the petitioner, contending that the filing timeline was directory rather than mandatory. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that a waiver application under Section 128A of the CGST Act and the Karnataka GST Act is not barred for a filing delay, as the timeline prescribed under the GST waiver scheme is directory and not mandatory. The Court observed that both the statutory provision and the accompanying notification explicitly employed the enabling term ‘may’ rather than the mandatory term ‘shall’, signifying that the filing timeline does not operate as an absolute limitation bar. The Court further noted that rejecting the application solely on the ground of delay misread a discretionary procedural timeline as a rigid, mandatory obligation, rendering the rejection unlawful. It was emphasised that the jurisdictional officer under CGST failed to appreciate the beneficial nature of the waiver scheme. Consequently, the Court quashed the impugned rejection order issued in Form GST SPL-07 and directed the authority to consider the petitioner’s waiver application on its merits under Section 128A of the CGST Act and the Karnataka GST Act.