Section 128A Waiver Cannot Be Denied for Wrong Tax Head | HC

Case Details: Ayiswarya Polymers vs. Assistant Commissioner of GST and Central Excise [2026] 187 taxmann.com 1107 (Madras) 

Judiciary and Counsel Details

• Senthilkumar Ramamoorthy, J.
• G. Sudhakar for the Petitioner.
• K.S. Ramasamy, Sr. SC for the Respondent.

Facts of the Case

The petitioner challenged the rejection of its application seeking a waiver. Pursuant to an order passed under Section 73 of the CGST Act, the petitioner discharged the entire tax liability within the prescribed statutory period. However, an amount was inadvertently remitted under the IGST head despite there being no IGST liability. The petitioner contended that the entire demand had been paid within time and that the erroneous payment under the wrong tax head constituted only a procedural defect, thereby satisfying the substantive requirement for the grant of waiver under Section 128A of the CGST Act. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the benefit under Section 128A of the CGST Act depends upon the discharge of the tax liability specified in the notice or order and that the petitioner had admittedly paid the entire amount within the prescribed period. The Court held that although a concessionary provision requires strict compliance with substantive conditions, procedural requirements are satisfied by substantial compliance where the object of the provision stands fulfilled. It was observed that rejecting the waiver application solely because part of the payment was made under the wrong tax head was unsustainable, given that the entire liability had already been discharged. Accordingly, the impugned order was set aside, and the matter was remanded for fresh consideration.

List of Cases Referred to

• Commissioner of Customs (Import), Mumbai v. Dilip Kumar & Company [2018] 95 taxmann.com 327/69 GST 239 (SC) (para 5).