2024 (12) TMI 1228 - HC - GST

Constitutional Validity of N/N. 07/2023, dated 31.03.2023, which is in violation of the Article 14 of the Indian Constitution and Principle of parity - different treatment to the assessee/dealers who had filed their GSTR-9/9C with delay before 01.04.2023 - direction to respondents, its servants, subordinates, agents and successors in office to forthwith withdraw and/or cancel the impugned order dated 30.11.2023 passed by the respondent No. 3 and the show cause notice dated 22.08.2023 issued under Section 74 of the Act imposing late fee. HELD THAT - It is evident that the intention of the Government is not to harass the assessee, who come forward to file their return for the assessment years mentioned in the notification within the stipulated period. Thus, it would imply that the benefit would extend to the petitioner as well, who filed the return although belatedly on 13.03.2023, which is before the cut off date mentioned in the above notification - It would be unjust to deny the benefit to the petitioner merely because the petitioner filed the return prior to the issuance of the amnesty notification dated 31.03.2023, confined to amnesty only to those who filed the return between 01.04.2023 and 30.06.2023. The intention of the government in issuing the aforesaid notification was to encourage filing of returns. Therefore, this Court is of the view that the petitioner is entitled to the benefit of notification dated 31.03.2023. The impugned order dated 30.11.2023 passed by respondent No. 3 and the show cause notice dated 22.08.2023 issued under Section 74 of the Act are set aside and the case is remanded back to the third respondent with a direction to pass fresh order on merit by extending the benefit of notification dated 31.03.2023 in accordance with law as expeditiously as possible preferably within three months from the receipt of the copy of this order - Petition allowed by way of remand.

Summary

Issues:
Challenge to Notification No. 07/2023 dated 31.03.2023 under Article 14 of the Indian Constitution and Principle of parity.
Entitlement of the petitioner to the benefit of the Notification No. 07/2023.
Validity of the show cause notice imposing late fee of Rs. 12,71,754.
Applicability of the amnesty scheme under Notification No. 7/2023 to the petitioner's case.
Denial of benefit to the petitioner due to filing the return before the issuance of the amnesty notification.
Interpretation of the intention of the government in issuing the notification.
Setting aside the impugned order and remanding the case for a fresh decision.

Analysis:
The petitioner filed a writ petition challenging Notification No. 07/2023 dated 31.03.2023, alleging violation of Article 14 of the Indian Constitution and the Principle of parity. The petitioner sought relief to declare the notification invalid and extend the benefit of concessional late fee to them. The petitioner, engaged in the business of manufacturing and sale of medicines, submitted their GSTR 9 return after the due date due to financial distress. The Central Board of Indirect Taxes and Customs issued the notification for waiver of late fee in excess of Rs. 20,000, but the petitioner was issued a show cause notice imposing a late fee of Rs. 12,71,754. The petitioner requested leniency based on the notification, but the benefit was denied by the respondent.

The court analyzed the provisions of Notification No. 07/2023 and considered the petitioner's case in light of a similar decision of the Kerala High Court. The court noted that the intention of the government was to encourage filing of returns within a stipulated period, and the benefit should extend to the petitioner who filed the return before the cut-off date mentioned in the notification. The court held that it would be unjust to deny the benefit to the petitioner merely because the return was filed before the issuance of the amnesty notification, which was limited to a specific period.

Consequently, the court set aside the impugned order and the show cause notice, remanding the case back to the respondent for a fresh decision. The court directed the respondent to pass a new order extending the benefit of the notification to the petitioner in accordance with the law expeditiously. The writ petition was allowed, and pending applications were disposed of with no costs awarded. The judgment emphasized the importance of interpreting government notifications to achieve the intended purpose of encouraging compliance and providing relief to taxpayers in distress.