General Penalty u/s 125 Invalid for Delayed GST Return Filing

Case Details: Caussa Tec Solutions (P.) Ltd. vs. Assistant Commissioner (ST) - [2026] 186 taxmann.com 1220 (Madras)

Judiciary and Counsel Details

C. Saravanan, J.
Ali Hassan Khan for the Petitioner.
C. Harsharaj, Special Govt. Pleader for the Respondent.

Facts of the Case

The petitioner was issued a show cause notice (SCN) in Form DRC-01 proposing levy of late fee and imposition of general penalty under Section 125 of the CGST Act and the corresponding provisions of the Tamil Nadu GST Act for alleged delayed filing of returns. Despite the notice, no response or appearance was recorded before the jurisdictional officer under the State GST administration, and an order was passed confirming the proposals made in the notice. Aggrieved by the said order, the petitioner challenged the imposition of general penalty under Section 125 while the levy of late fee for delayed filing of returns was not in dispute. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the imposition of general penalty under Section 125 of the CGST Act was unsustainable where a specific statutory mechanism in the form of late fee under Section 47 of the CGST Act already governed delayed filing of returns. It held that Section 125 operates as a residual penalty provision and can be invoked only in cases where no other specific penalty or statutory levy exists for the default in question. The Court further held that since late fee was specifically leviable for delay in filing returns, invocation of general penalty under Section 125 amounted to impermissible duplication of statutory levy. Accordingly, the Court set aside the imposition of general penalty while upholding the liability to pay late fee and partly allowed the writ petition to that extent.