General penalty under Section 125 cannot be superimposed

General penalty under Section 125 cannot be superimposed when a specific late fee applies for delayed returns.

Issue

Whether the tax authority is legally justified in imposing a residual general penalty under Section 125 of the GST Act in addition to a specific late fee under Section 47 for the delayed filing of GST returns.

Facts

The Notice: The proper officer issued a Show Cause Notice (SCN) in Form GST DRC-01 proposing both a late fee and a residual general penalty under the CGST and SGST Acts for delayed return filing.
Inaction: The taxpayer failed to file a reply or appear for a personal hearing before the tax authority.
The Order: The proper officer passed an assessment order confirming the initial proposal and levied the general penalty over and above the standard late fee.
The Challenge: The assessee filed a writ petition directly challenging the legal validity of superimposing a general penalty alongside a specific late fee.

Decision

Covered by Precedent: The High Court noted that the core issue was explicitly covered by the judicial precedent set in Kandan Hardware Mart v. Asstt. Commissioner (ST) (FAC) (2026).
Scope of Section 125: The Court held that the residual general penalty under Section 125 applies only as a catch-all provision in cases where no other specific penalty or statutory levy is prescribed by the Act.
No Double Imposition: Because a specific late fee is already structurally leviable under Section 47 for delays in filing returns, a parallel general penalty under Section 125 cannot be superimposed for the exact same infraction.
Order Modified: The writ petition was partly allowed. The Court deleted the unsustainable general penalty while confirming that the assessee remains fully liable to pay the designated late fee.

Key Takeaways

Exclusivity of Specific Penalties: If a specific statutory provision (like Section 47) addresses a particular non-compliance with a dedicated fee or penalty, the revenue department cannot leverage the catch-all general provision (Section 125) to amplify the financial burden.
Nature of Section 125: Section 125 functions strictly as a residual tool. It cannot be used to penalize common, scheduled compliance delays that already carry their own built-in financial corrections.
Partial Relief via Writs: Even if a taxpayer defaults on responding to a Show Cause Notice at the adjudication stage, they can still successfully challenge the legal validity of an incorrect, double-penalizing order via writ jurisdiction.

HIGH COURT OF MADRAS

Caussa Tec Solutions (P.) Ltd.

Assistant Commissioner (ST)

C. Saravanan, J.

W.P. No. 16991 of 2026
W.M.P. No. 18303 & 18304 of 2026

APRIL 29, 2026

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

ORDER

1. Mr. C. Harsharaj, the learned Special Government Pleader, takes notice on behalf of 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 Special Government Pleader for the Respondent.

3. The Petitioner is before this Court against the impugned Order dated 26.11.2025, whereby, the proposal in Show Cause Notice in DRC 01 dated 03.01.2025 has been confirmed in the absence of reply. By the impugned Order, the following demand has been confirmed against the Petitioner:

Proper Officer Observation:

“In this regard, DRC 01 was issued on 03.01.2025 with personal hearing dated on 20.01.2025. Hence again a Reminder 01 was issued on 22.08.2025 with personal hearing dated 28.08.2025 and Reminder 02 was issued on 03.11.2025 with personal hearing dated on 07.11.2025. Again Reminder 03 was issued on 12.11.2025 with personal hearing dated on 18.11.2025. But the tax payer not responded till now, and the tax payer have not appeared for personal hearing. Hence, it is ascertained that there is no contention to be produced by the tax payer and necessary orders are passed under Section 73 of TNGST Act, 2017. Hence, the proposal is confirmed as follows:

Revenue Abstract

ACT	Penalty	Late Fee	Total
CGST	25000	95498	1,20,498
SGST	25000	95498	1,20,498

4. A Perusal of the impugned Order indicates that the issue is at the moment covered by the decision of this Court in Kandan Hardware Mart v. Asstt. Commissioner (ST) (FAC) 114 GST 267 (Madras)/W.P. No. 27029 of 2023 vide order dated 02.01.2026. Operative portion of the said order reads as under:-

“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. Therefore, the benefit of the above Notifications namely Notification No.7/2023- Central Tax dated 31.03.2023 as amended by Notification No.25/2023-Central tax dated 17.07.2023 has to be extended to all those Petitioners in Table -4A who had filed the returns before 01.04.2023.

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.

208. It is therefore held that the Petitioners in Table-4A are neither liable for “Late Fee” over and above Rs.10,000/- under each of the respective GST Enactments nor liable for “General Penalty” under Section 125 of the respective GST Enactments.

209. As far as the case of Petitioners in Table-4B namely the Petitioners in W.P.No.19967 of 2023 and W.P.Nos.23356, 30854, 9867 of 2024 and W.P.Nos.47726, 38007, 48941 of 2025 are concerned, they have been subjected to only “Late Fee” under Section 47(2) of the respective GST Enactments. They have not been subjected to “General Penalty” under Section 125 of the respective GST Enactments.

210. Since these Petitioners have also filed the “Annual Returns” before 01.04.2023, they cannot be subjected to “Late Fee” over and above Rs.10,000/- under each of the respective GST Enactments as ordered in the case of those Petitioners in Table-4A.

211. As far as the case of Petitioner in Table-4C namely the Petitioner in W.P.No.3915 of 2024 is concerned, the said Petitioner has filed the “Annual Return” only on 19.01.2024 for the Tax Period 2020-2021. It was within the time under Section 44(2) of the respective GST Enactments as the said date would have expired on 31.12.2024. However, there is no scope for granting any waiver from payment of “Late Fee” under section 47 of the respective GST Enactments, as it was long after the date specified in Section 44(1) of the respective GST Enactments read with Rule 80(1) of the respective GST Rules. The said Petitioner has been imposed with “General Penalty” of Rs.25,000/- each under Section 125 of the respective GST Enactments. There is no scope for imposing “General Penalty” under Section 125 of the respective GST Enactments for the reasons stated for the other Petitioners. Therefore, to that extent W.P.No.3915 of 2024 deserves to be allowed.

212. In the result,

(i)

W.P.Nos.3540, 3567, 3570, 3902 and 3966 of 2024 as detailed in Table-3 are allowed. Therefore, “General Penalty” imposed under Section 125 of the respective GST Enactments on these Petitioners are set aside.

(ii)

W.P.Nos.27029, 27032, 27036, 32599, 34352, 34357, 35186 of 2023 and W.P.Nos.3572, 3916, 15690 of 2024 and W.P.Nos.9988, 28786, 42416, 46522 of 2025 as detailed in Table-4A are allowed. Therefore, “General Penalty” imposed under Section 125 of the respective GST Enactments on these Petitioners are set aside. These Petitioners are liable to pay a “Late Fee” of Rs.10,000/- under the respective GST Enactments.

(iii)

W.P.No.19967 of 2023 and W.P.Nos.23356, 30854, 9867 of 2024 and W.P.Nos.47726, 38007, 48941 of 2025 as detailed in Table-4B are allowed. These Petitioners are liable to pay a “Late Fee” of Rs.10,000/- under the respective GST Enactments.

(iv)

W.P.No.3915 of 2024 in Table-4C is partly allowed. However, imposition of “General Penalty” under Section 125 of the respective GST Enactments is set aside in view of imposition of “Late Fee” against the Petitioner.

(v)

No costs. Consequently, all connected Writ Miscellaneous Petitions are closed.”

5. In view of the above, Writ Petition is partly allowed, in so far as imposition of general penalty under Section 125 of the TNGST Act 2017. The Petitioner shall pay the late fee imposed on him within a period of 30 days from the date of receipt of a copy of this order if the payment has not been already. Consequently, the connected miscellaneous petitions are closed. No costs.