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2024 (8) TMI 247 - HC - GST


Issues:
Imposition of penalty without considering amounts remitted earlier; Rejection of appeal on the ground of limitation; Interpretation of Section 73 and Section 128A of GST enactments regarding penalty imposition.

Analysis:
The High Court of Madras addressed a writ petition challenging an order imposing a penalty without considering the amounts remitted by the petitioner earlier. The petitioner had reversed ineligible Input Tax Credit (ITC) and requested for dropping the proceedings. The first appellate authority rejected the appeal on the ground of limitation. The petitioner argued that the penalty was imposed despite discharging the liability before the show cause notice and that 10% of the remitted amounts could not be penalized as per Section 73 of GST enactments. The respondent contended that the petitioner's reply was considered, and no interference was warranted as an appeal was lodged. The impugned order revealed that the petitioner had remitted significant sums towards ineligible ITC before the notice. The petitioner argued that the penalty imposition contravened Section 73 and Section 128A of GST enactments, justifying reconsideration only on the penalty issue.

The Court set aside the impugned order in terms of penalty imposition, remanding the matter to the respondent for reconsideration. The respondent was directed to issue a fresh order on penalty within three months, providing a reasonable opportunity to the petitioner, including a personal hearing. The writ petition was disposed of without costs, and connected miscellaneous petitions were closed. The judgment clarified the interpretation of Section 73 and Section 128A of applicable GST enactments regarding the imposition of penalties, emphasizing the importance of considering amounts remitted by the taxpayer before issuing penalties.

 

 

 

 

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