Section 73 GST Act | Penalty Will Be Imposed If Tax Collected Is Not Deposited Within 30 Days From Due Date Of Payment: Kerala High Court

The Kerala High Court held that the provisions of Section 73(8) of the GST Act, 2017, would not be applicable if a person who is liable to pay tax fails to deposit the tax collected by him within 30 days from the due date of payment.

The Court dismissed a Writ Petition challenging the order of the Tax Assessing Authority under whereby a penalty was imposed due to non-payment of tax after the lapse of thirty days.

“Considering the provisions of Sub-sections 6, 8 and 9 of Section 73 of the GST Act, 2017 it is provided that if a person chargeable to tax fails to deposit the tax collected by him within a period of thirty days from the due date of the payment of the such tax, Sub-section 8 will not have any effect and such a person is liable to pay penalty”, Justice Dinesh Kumar Singh observed.

Advocate P.N. Damodaran Namboodiri appeared for the Petitioner and Government Pleader Jasmine M.M appeared for the Respondent.

A Writ Petition was filed before the Court challenging the order of the Tax Assessing Authority whereby, the penalty assessed was to the extent of Rs. 40,000/- . The Petitioner contended that they had paid the tax within 30 days from the issue of notice along with interest and had to still pay the penalty under Section 73 of the GST Act, 2017.

The Court ascertained, “The question is whether an assessee who had paid the tax within thirty days from the issue of notice along with interest would be held to be liable for penalty”.

In light of the provisions of Sub-sections 6, 8, and 9 of Section 73 of the Act, the Court noted that if an individual who is required to pay taxes does not deposit the tax collected within thirty days of the due date, Sub-section 8 will be ineffective, and the person will be liable to pay a penalty. Therefore, the Court held that the order of the Assessing Authority needed no interference.

Accordingly, the Court dismissed the Petition and affirmed the impugned order.

Cause Title: M/S. Global Plasto Wares v Assistant State Tax Officer (2023:KER:64562)

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