HC Permitted Assessee to File Appeal Beyond Time Limit as He Discharged GST Liability Prior to Issuance of SCN

Case Details: Alamelu Construction v. Assistant Commissioner of GST & Central Excise - [2024] 162 taxmann.com 728 (Madras)

Judiciary and Counsel Details

• • Senthilkumar Ramamoorthy, J.
  • N. Viswanathan for the Petitioner.
  • Ramesh Kutty, Sr. Standing Counsel for the Respondent.

Facts of the Case

The petitioner is a proprietorship concern and it received a show cause notice for not remitting the GST liability. The department contended that the petitioner collected taxes in respect of the outward supply of goods/services but failed to remit tax. However, the petitioner had discharged the GST liability even prior to the issuance of show cause notice and interest was levied.

The order was challenged and the petitioner contended that it was entitled to the benefit of the proviso to Section 50(1) of the CGST Act, 2017. It was also submitted that he would not be liable to penalty as a 100% penalty was imposed. The department submitted that the petitioner would not be entitled to the benefit of the proviso to Section 50(1) as he discharged the liability after the commencement of proceedings.

High Court Held

The High Court noted that the petitioner discharged the GST liability prior to the issuance of show cause notice. The Court also noted that a 100% penalty was not justified.

The Court further noted that the time limit for filing an appeal expired and the petitioner was willing to remit a sum of Rs. 2.5 lakhs as a condition for being permitted to present a statutory appeal. Therefore, the Court held that the petitioner would be permitted to present a statutory appeal before the appellate authority and it was directed to receive and dispose of the same on merits without going into the question of limitation.