Late Fees Apply Equally To Non-Filing Of GST Annual Returns And General Penalty Can Be Levied In Addition To Late Fees As No Separate Penalty Exists

Late Fees Apply Equally To Non-Filing Of GST Annual Returns And General Penalty Can Be Levied In Addition To Late Fees As No Separate Penalty Exists

Issue

1. Whether a statutory late fee under Section 47 of the CGST/TNGST Act, 2017 can be levied for the absolute non-filing of an annual return (Form GSTR-9), or if it applies strictly to instances of belated/delayed filing.

2. Whether the revenue department is legally justified in imposing a general penalty under Section 125 in addition to a late fee under Section 47 for the same default of failing to furnish an annual return.

Facts

• The Default: For the financial period 2017-2018, the petitioner failed to furnish the mandatory annual return in Form GSTR-9 within the prescribed statutory due date.

• Administrative Action: The tax authority passed an order imposing both a statutory late fee and an additional general penalty on the petitioner for this default.

• Petitioner’s First Contention: The petitioner filed a writ petition arguing that a “late fee” is conceptually and textually intended to penalize a delayed submission (“belated filing”) and cannot be legally triggered in cases where no return has been filed at all (“non-filing”).

• Petitioner’s Second Contention: The petitioner further argued that imposing a general penalty alongside a late fee for the exact same non-compliance amounts to double jeopardy or duplicative punishment for a single infraction.

Decision

• Held, In Favor of Revenue (Issue I): The levy of the late fee is entirely valid, and the petitioner’s argument distinguishing non-filing from belated filing is untenable. The plain text of Section 47 mandates that a late fee is attracted the moment a registered person “fails to furnish” the return by the due date. The statutory late fee of ₹100 per day of default (subject to a maximum cap of 0.25% of the total turnover) applies continuously from the day after the due date, regardless of whether the return is eventually filed late or not filed at all.

• Held, In Favor of Revenue (Issue II): The imposition of the general penalty under Section 125 is sustained. Section 125 acts as a residual clause that enables a penalty up to ₹25,000 for any contravention of the Act or rules where no separate, specific penalty is explicitly provided. Since the GST statute contains no specialized penalty provision tailored for GSTR-9 defaults, the invocation of the general penalty in addition to the automated late fee is structurally and legally justified.

Key Takeaways

• Non-Filing Does Not Evade Late Fees: A taxpayer cannot escape the accumulation of statutory late fees by simply choosing to never file a return. The infraction commences automatically on the midnight of the due date, and the liability stays locked at the statutory cap even under total non-filing.

• Distinct Legal Character of Fees vs. Penalties: A late fee under Section 47 is a compensatory, time-bound financial consequence for a scheduling delay, whereas a general penalty under Section 125 is a punitive measure for a statutory breach. They are concurrent liabilities and do not constitute double taxation.

• Invocation of Residual Penalty Clauses: Taxpayers must recognize that the absence of a specific penalty section for a particular compliance form does not grant immunity; instead, it automatically triggers the application of the omnibus general penalty provision under Section 125.