Penalty or Late Fee Shouldn’t Be Levied for Making Payment of Kerala Flood Cess Under Wrong Head in GSTR-3B | Kerala HC

Case Details: Kannan Paint & Radhas Hardware v. Deputy Commissioner of State Tax SGST - [2023] 157 taxmann.com 652 (Kerala)

Judiciary and Counsel Details

• • Dinesh Kumar Singh, J.
  • G. Harikumar (Gopinathan Nair), Akhil Suresh & Anu Balakrishnan Nambiar , Advs. for the Petitioner.
  • Sunil. J. & M.S. Amal Dharsan for the Respondent.

Facts of the Case

The petitioner was a registered dealer under the GST Act, 2017. In June 2019, the Kerala Government imposed ‘Kerala Flood Cess (KFC)’ at the rate of 1% of the tax liability. The department issued notice for making the deposit of KFC and filing the return in KFC-A to remit the flood cess for the period from August 2019 to July 2021. It submitted that it had paid Cess under incorrect head through GSTR-3B.

But the department informed that the payment head and utilization head were different and same cannot be adjusted to flood Cess. The petitioner filed writ petition and requested to allow to adjust amount paid under wrong head.

High Court Held

The Honorable High Court noted that the petitioner had committed a bona fide mistake of depositing the KFC in the wrong account along with its GSTR-3B as it had paid the KFC on time, but in the wrong account.

Thus, the Court held that the petitioner should not be saddled with any penalty or late fee in respect of payment of Kerala flood Cess for period on wrong head along with its GSTR-3B. However, the Court also held that the petitioner was not vigilant in responding to the notices issued and thus, the petitioner should pay the interest.