Levy of Late Fee for Delay in Filing Annual Return Was Valid and Imposition of General Penalty to Be Set Aside | HC

Case Details: Tvl. Jainsons Castors & industrial Products vs. Assistant Commissioner (ST) - [2025] 172 taxmann.com 358 (Madras)

Judiciary and Counsel Details

• Krishnan Ramasamy, J.
• M. Varun Pandian, for the Petitioner.
• C. Harsha Raj, Additional Government Pleader (Tax) for the Respondent.

Facts of the Case

The petitioner, a registered taxpayer under the Tamil Nadu, delayed filing its annual return under Section 44. Consequently, the respondent issued a show cause notice under Section 47 read with Section 73, proposing a late fee. The petitioner, while accepting the late fee, challenged the necessity of issuing the notice under Section 47 read with Section 73. Additionally, the respondent imposed a general penalty under Section 125, which the petitioner contended was unwarranted, as Section 47 specifically provided for late fees, and Section 125 applied only where no specific penalty was prescribed. The matter was brought before the Hon’ble High Court.

High Court Held

The Hon’ble High Court affirmed the validity of the show cause notice, stating that the delay in filing the annual return rightly attracted a late fee under Section 47(2). Since Section 47 independently governs late fees, the respondent was justified in issuing the notice. However, the Court found the general penalty under Section 125 incorrect, as a specific penalty had already been levied. It was held that Section 125 applies only in the absence of a prescribed penalty, rendering the additional penalty unjustified. Consequently, the general penalty was set aside, while the late fee was upheld, partly favouring the petitioner.