ACS Technologies vs The Superintendent

In the present batch of petitions, common questions of fact and law are involved. Therefore, they have been heard together and disposed of with a common judgment. The relevant facts of one of the writ petitions, W.P (C) No. 30644 of 2023, are extracted hereunder, which are almost similar to other writ petitions except for a few dates and figures. The petitioner, in this case, is an assessee under the provisions of the CGST/SGST Acts and has been diligently filing proper returns under the Act. However, the petitioner had filed the annual return in FORM GSTR-9 for the financial years 2017-18, 2018-19, and 2019-20 belatedly. Despite the delay, the petitioner has paid the requisite late fee for the belated filing of the annual returns for the said years under Section 47(2). Nonetheless, the respondent has demanded an additional late fee and created a substantial demand by adopting the date of filing the reconciliation statement in FORM GSTR-9C as the date of filing the return, as indicated in Ext. P4 order. The Central Government has now introduced an amnesty scheme, as per Ext. P5 notification, which should be construed as beneficial to the petitioner.

The petitioner operates as a proprietorship concern dealer under the CGST/SGST Act, 2017 and the Rules made thereunder. The petitioner is engaged in trading paint, cement, aluminum sheets, and hardware, and has been consistently filing proper returns and paying the tax dues accordingly. However, the petitioner did not file his returns within the prescribed time limit set forth by the Statute. As per Section 44(1) read with Rule 80 of the CGST/SGST Act, the annual return in Form GSTR-9 is required to be filed before the 31st of December following the end of the relevant financial year. Recognizing the operational difficulties during the initial phase of implementing the GST regime, particularly Rule 80 of the GST Rules, 2017, along with the challenges posed by the COVID-19 pandemic, the Government extended the last date to file the returns for the financial years 2017-2018, 2018-2019, and 2019-2020 through various notifications, including No. 6/2020-CT dated 03.02.2020, 80/2020-CT dated 28.10.2020, and 4/2021-CT dated 28.02.2021, respectively.

The petitioner has made all necessary payments of tax due and the interest for filing the returns, in addition to the prescribed late fee under Section 47 of the CGST/SGST Act. A detailed chart would illustrate the due dates and actual filing dates of the return in FORM GSTR-9 and the reconciliation statement in FORM GSTR-9C. The petitioner has been issued with a show-cause notice dated 29.03.2023, which calculated the number of days of delay in filing the annual returns. The respondent has proposed to demand a late fee amounting to Rs. 2,93,600/- under Section 47(1) of the CGST/SGST Act, after adjusting the late fee of Rs. 57,600/- already paid by the petitioner. This has led to the current dispute, where the petitioner seeks relief under the newly introduced amnesty scheme, arguing that the scheme should be applied beneficially, reducing the additional late fee demand raised by the respondent. The resolution of these petitions will have significant implications for the petitioner and similarly placed assessees, highlighting the broader issues of compliance and the administrative challenges encountered during the transition to the new GST regime. The petitioner’s case exemplifies the complexities faced by businesses in adhering to evolving tax regulations and underscores the need for clarity and fairness in the enforcement of such statutory requirements.

A corrigendum dated 13.04.2023 was issued by the respondent, clarifying that the reference to Section 47(1) in the show cause notice dated 29.03.2023 should be read as Section 47(2) of the GST Act. In response, the petitioner submitted a detailed reply dated 25.04.2023, outlining objections to the proposals in the aforementioned notice and requesting that the same be dropped. The petitioner argued that a registered person is liable to pay the late fee under Section 47(2) only when they fail to furnish the return in FORM GSTR-9 under Section 44 of the CGST/SGST Act. The petitioner contended that FORM GSTR-9C is merely a reconciliation statement to be filed along with the annual return, and is not considered a return under Section 44 of the CGST/SGST Act. Consequently, the late fee is leviable only up to the late filing of the GSTR-9 return and not the GSTR-9C reconciliation statement. Despite these objections, the respondent disagreed and passed an order dated 21.08.2023, confirming the demand for a late fee of Rs. 2,93,600/- (Rs.1,46,800/- under the CGST Act and Rs.1,46,800/- under the SGST Act) under Section 47(2) of the CGST/SGST Act, due to the delay in filing returns prescribed under Section 44(2) of the CGST/SGST Act for the periods from 2017-2018 and 2019-2020. An amount of Rs. 57,600/- paid by the petitioner towards the late fee was appropriated against the confirmed demand.

The learned counsel for the petitioner submitted that the Government issued Notification No.7/2023-CT dated 31.03.2023, providing an Amnesty Scheme for non-filers of GSTR-9 returns, exercising the powers conferred under Section 128 of the CGST/SGST Act on the recommendation of the GST Council. This scheme allowed non-filers of returns for the financial years 2017-2018 to 2021-2022 to file their returns in GSTR-9 and 9C initially until 30.06.2023. Subsequently, this deadline was extended to 17.07.2023 through Notification No.25/2023 dated 30.06.2023. Under the Amnesty Scheme, the late fee in excess of Rs.10,000/- to be paid under Section 47 of the CGST/SGST Act, for the returns of financial years 2017-2018 to 2019-2020, was waived. The petitioner asserted that they had filed the annual return for the said years as early as 2020-2021, and before the commencement of the Amnesty Scheme on 01.04.2022. Therefore, the petitioner argued that they should also be extended the benefits of these notifications, and requested that the order in question (Ext.P4) be set aside.

On the other hand, Mr. Sreelal Warrier, the learned Standing Counsel appearing for the respondents in the writ petitions, supported the stand of the revenue. He argued that the Amnesty Scheme is applicable only to persons who had not filed the return for the financial years 2017-2018, 2018-2019, and 2019-2020, and not to those who had filed the return for these financial years before 01.04.2023. He emphasized that dealers who did not file the returns for the financial years 2017-2018, 2018-2019, and 2019-2020, but furnished the returns on or after 01.04.2023 up to 31.08.2023, would have their late fee limited to Rs.10,000/- only. This Amnesty Scheme, according to Mr. Warrier, is not available to individuals who had already filed their returns before 01.04.2023 for the said financial years. Furthermore, he argued that under the unamended Section 44 of the CGST/SGST Act, FORM GSTR-9 and 9C were required to be filed together. Therefore, if GSTR-9C was not filed along with GSTR-9, it could not be said that the dealer had filed the annual return as required under Section 44 of the CGST/SGST Act. Consequently, the date of filing GSTR-9C would be the relevant date for calculating the late fee if it was not filed along with GSTR-9.

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