No Double Jeopardy: General Penalty Dropped Where Specific Late Fee for Same Period Exists

The Legal Issue

Whether the GST Department can impose a General Penalty (Section 125) in addition to a Late Fee (Section 47) for the same tax period, and whether multiple assessment orders can impose redundant penalties for the same underlying default.

Facts of the Case

The Assessment: The petitioner challenged an assessment order (Form GST DRC-07) for the period 2021-2022.
Dual Levy: The order imposed two distinct financial charges:
1. A Late Fee of ₹1,67,200 for delayed return filing under Section 47.
2. A General Penalty of ₹50,000 under Section 125.
The Conflict: The petitioner pointed out a significant procedural error: another assessment order had already been passed for the same tax period, which had also imposed a ₹50,000 penalty. This resulted in a “double penalty” scenario for a single period of non-compliance.

The Decision (Madras High Court)

The Court provided relief by applying the principle that penal provisions must be specific and non-overlapping:

General Penalty is a “Fallback”: Section 125 (General Penalty) applies only where no specific penalty is provided in the Act. Since Section 47 specifically provides for a “Late Fee” to regularize delayed returns, invoking Section 125 for the same delay is legally impermissible.
Dropping the Duplicate Charge: Taking note of the two overlapping assessment orders, the Court ordered the dropping of the ₹50,000 general penalty.
Conditional Quashing: The Court maintained the liability for the Late Fee (₹1,67,200). It directed that:
1. The petitioner must pay the late fee within 30 days.
2. Upon payment, the impugned order would stand quashed and all recovery proceedings (like bank attachments) would be dropped.
Merit Review: The case was remanded to the Appellate Authority to pass a final order on the remaining merits of the assessment.
Outcome: Partly in favour of the assessee.

Key Takeaways for Taxpayers

The “Late Fee is Penalty” Rule: The Madras High Court has consistently ruled (e.g., in Kandan Hardware Mart) that a late fee is penal in nature. Therefore, imposing an additional general penalty for the same delay constitutes “Double Jeopardy.”
Check for Overlapping Orders: Always verify if the Department has issued multiple DRC-07s for the same period. This often happens when different modules (Return Filing vs. Scrutiny) trigger separate automated or manual proceedings.
Section 125 Limits: If your notice proposes a ₹25,000 CGST + ₹25,000 SGST penalty (total ₹50k) for simply filing returns late, you can contest it on the grounds that Section 47 is the only applicable provision for that specific default.

HIGH COURT OF MADRAS

Prajith Enterprises

State Tax Officer^*

C. Saravanan, J.

WP No. 2618 of 2026
WMP NO. 2847, 2849 OF 2026

JANUARY 27, 2026

Sanskar Samdaria S for the Petitioner. Mrs. K. Vasanthamala, Government Adv. for the Respondent.

ORDER

1. Mrs. K. Vasanthamala, learned Government Advocate takes notice for the Respondent.

2. This Writ Petition is being disposed of at the stage of admission itself with the consent of the learned counsel for the Petitioner and the learned Government Advocate for the Respondent.

3. The Petitioner is before this Court against the impugned order dated 15.04.2025 in Form GST DRC-07 passed under Section 73 of the respective GST Enactments for the tax period 2021-2022, which was preceded by a Show Cause Notice and thus suffered the impugned order. By the impugned order, Late Fee under Section 47(2) of the respective GST Enactments and also General Penalty under Section 125 of the respective GST Enactments has been imposed as detailed below :-

Act	Late fee (Rs.)	Penalty (Rs.)	Total (Rs.)
CGST	83600	25000	108600
SGST	83600	25000	108600
Total	167200	50000	217200

4. The petitioner has challenged the impugned order on the ground that another Assessment Order dated 13.05.2025 was passed for the same tax period, wherein also the petitioner has been subjected to a penalty of Rs.50,000/- for the same tax period.

5. Facts on record reveal that the petitioner has preferred an appeal on 11.08.2025 against the aforesaid Assessment Order dated 13.05.2025 before the Appellate Authority.

6. The learned counsel for petitioner submitted that both General Penalty and Late Fee go hand in glove. The learned counsel for petitioner further submitted that the issue has also now attained clarity in terms of decision rendered by this Court in Ms. Kandan Hardware Mart v. Asstt. Commissioner (ST) (FAC) (Madras)/W.P.No.27029 of 2023, dated 02.01.2026 wherein it has been observed as under:-

“203. To single them out would amount to hostile discrimination and contrary to Article 14 of the Constitution of India. To suspend “Late Fee” would also lead to mistrust in the tax administration and would be an anathema to Article 14 of the Constitution of India.

204. To single out would amount to arbitrary exercise of law failing the test of arbitrariness recognized under Article 14 of the Constitution of India.

205. The Division Bench of the Himachal Pradesh High Court in the case of M/s.R.T.Pharma v. Union of India and others, while dealing with a similar issue arising out of delay in filing of the “Annual Returns” in GSTR-9 under Section 39 of the respective GST Enactments held that it would be unjust to deny a “Late Fee”, waiver to a taxpayer who filed their Goods and Services Tax (GST) Annual Returns (GSTR-9 and GSTR-9C) before a specific Amnesty Notification was issued in Notification No.7/2023-Central Tax dated 31.03.2023, and was amended by Notification No.25/2023-Central Tax dated 17.07.2023.

206…….

207. Since these Petitioners are liable to pay “Late Fee”, the question of imposing “General Penalty” under Section 125 of the respective GST Enactments cannot be countenanced in view of the reasons that “General Penalty” under Section 125 of the respective GST Enactments can be imposed only in the absence of ‘any other penalty’ under the respective GST Enactments.”

7. The learned counsel for respondent also conceded that the aforesaid decision has not been appealed as of now and the order governs field.

8. Recording the above submission and taking note of the fact that two Assessment Orders have been passed on 13.05.2025 and 15.04.2025 for the same tax period, this Writ Petition is disposed of by dropping the General Penalty of Rs.50,000/- imposed on the petitioner under Section 125 of respective GST Enactments. The petitioner shall pay a Late Fee of Rs.1,67,200/- confirmed by the impugned order within a period of 30 days from the date of receipt of a copy of this order.

9. In case the Petitioner complies with the above stipulations, the impugned order dated 15.04.2025 passed by the Respondent shall stand quashed and also recovery proceedings shall also be dropped.

10. Subject to the Petitioner complying with the above stipulations, the Appellate Authority shall proceed to pass a final order on merits in the appeal pending against order dated 13.05.2025 and in accordance with law as expeditiously as possible, preferably, within a period of three (3) months of such deposit and the attachment of the bank account of the Petitioner shall also stand automatically vacated.

11. In case the Petitioner fails to comply with any of the stipulations, the Respondent is at liberty to proceed against the Petitioner to recover the late fee in accordance with law as if this Writ Petition was dismissed in limine today.

12. This Writ Petition stands disposed of with the above observations. No costs. Connected Writ Miscellaneous Petitions are closed.