Demand of statutory late fee under Section 47 determined within Section 73 adjudication proceedings is valid.

By | August 7, 2026
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Demand of statutory late fee under Section 47 determined within Section 73 adjudication proceedings is valid.
Issue
Whether tax authorities have the jurisdiction to determine and demand statutory late fees for delayed return filing under Section 47 through adjudication proceedings initiated under Section 73.
Facts
  • Registration & Non-Compliance: The petitioner, a proprietorship firm engaged in the medicine trade and registered under GST, failed to file returns for the period 2020–2021.
  • Issuance of SCN: The Proper Officer issued a Show Cause Notice (SCN) for non-filing of returns.
  • Adjudication & Demand: In adjudication proceedings, the authority assessed tax dues and determined the late fee for delayed filing under Section 73 read with Section 47, raising a formal demand.
  • Writ Challenge: The petitioner challenged the demand notice via a writ petition, arguing that the authority lacked jurisdiction to demand late fees through proceedings under Section 73.
Decision
  • Statutory Mandate: Late fees flow directly from the statutory mandate of Section 47 for delays in filing GST returns [Para 7].
  • No Jurisdictional Defect: Determining the late fee alongside tax liability within the same Section 73 adjudication proceeding does not suffer from any jurisdictional infirmity [Para 7].
  • Demand Upheld: The demand notice issued for tax and late fee is valid and enforceable [Para 7].
  • Outcome: The writ petition was dismissed as devoid of merit, deciding the matter in favour of the Revenue [Para 7].
Key Takeaways
  • Co-extensive Adjudication: Tax authorities are legally competent to assess and demand statutory late fees under Section 47 alongside tax liabilities in Section 73 adjudication proceedings.
  • Automatic Statutory Liability: Late fees accrue by operation of law upon default in filing returns, and their inclusion in an assessment order does not invalidate the demand notice.
  • Enforceability: A demand for late fees determined through regular adjudication is legally valid, enforceable, and cannot be challenged on ground of lack of jurisdiction.
HIGH COURT OF PATNA
Madhu Sudan Periwal
v.
State of Bihar
Anil Kumar Sinha and Vikash Kumar, JJ.
Civil Writ Jurisdiction Case No. 8387 of 2026
JULY  15, 2026
 favour of revenue]
Hasnain Haider, Adv. for the Petitioner.
ORDER
Anil Kumar Sinha, J. – The petitioner has filed the present writ application for quashing the order of demand dated 24.02.2025, passed by respondent no. 3 under Section 73(9) of the Central Goods and Services Tax Act, 2017/State Goods and Services Act, 2017, by which a late fee of Rs. 2,00,000/- has been imposed upon the petitioner.
2. Learned counsel for the petitioner submits that the petitioner is a proprietorship firm under the name and style of “M/S Tirupati Distributors” and is engaged in the business of medicines. The petitioner has been registered under G.S.T. having G.S.TIN No. 10AHCPP9269KIZI.
3. Learned counsel for the petitioner submits that determination of tax and penalty has come to a naught but, a late fee of Rs. 2,00,000/- has been imposed under Section 47 of the Central Goods and Services Act, 2017. The assessment of levy done under Section 73(9) is without jurisdiction and the fine cannot be levied under Section 73 of the Act.
4. He further submits that tax period is of 2020-2021 and the demand of late fee is only without jurisdiction. Section 73(1) of the Act restricts its applicability to the situation where any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilized. The scope of statutory provision under Section 73(1) is limited to the imposition of tax and input tax credit and omits the adjudication or recovery of late fee from its ambit.
5. Learned counsel for the State argued that the demand notice for late fee is dated 24.02.2025, against which the petitioner could have filed appeal within 90 days + 30 days, but the petitioner has not filed appeal and has directly after lapse of about one year has filed the present writ application.
6. Learned counsel for the State further submits that there is specific provision under Section 47 of the Central Goods and Services Act, 2017/State Goods and Services Act, 2017 for levying late fee. Since the petitioner has not filed his return, as such during assessment under Section 73, it was found that the late fee is liable to be levied against the petitioner.
7. Considering the rival submission of the parties and the fact that the petitioner failed to file return during the tax period of 2020-2021 and the respondent authority after issuing show-cause notice to the petitioner has assessed the tax as well as late fee amount under Section 73 read with Section 47 of the Act. Accordingly, we do not find any infirmity in the demand notice, the present writ application, having no merit, is dismissed.