Statutory Late Fees Apply to Complete Non-Filing of GSTR-9, and General Penalty Can Be Levied Jointly for the Same Default

Statutory Late Fees Apply to Complete Non-Filing of GSTR-9, and General Penalty Can Be Levied Jointly for the Same Default

Issue

1. Whether the statutory late fee under Section 47 is leviable only in cases of delayed/belated filing of the GSTR-9 annual return, or if it applies equally to cases of absolute non-filing.

2. Whether the tax authorities are legally justified in imposing a general penalty under Section 125 in addition to a late fee under Section 47 for the single default of failing to file an annual return.

Facts

• The Default: For the financial year 2017-18, the petitioner completely failed to furnish their annual return in Form GSTR-9 within the prescribed statutory timelines.

• The Department’s Action: The tax department issued an order imposing both a statutory late fee and an additional general penalty on the petitioner for this default.

• The Non-Filing Argument: The petitioner challenged the order through a writ petition, arguing that a “late fee” is conceptually and textually intended to punish belated filings. Therefore, they claimed it cannot be mathematically calculated or levied if a taxpayer does not file the return at all.

• The Double Penalty Argument: The petitioner further contended that since a late fee was already being recovered under Section 47 for the filing default, the department was barred from executing a double jeopardy action by levying a general penalty under Section 125 for the exact same omission.

Decision

• Late Fee Applies to Non-Filing: The High Court held that the plain text of Section 47 targets any registered person who “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 total turnover) triggers the moment the due date passes. The argument that non-filers escape late fees was rejected as untenable. (In favor of revenue)

• Dual Levy of General Penalty Upheld: The court noted that Section 125 acts as a residuary clause, enabling a general penalty of up to ₹25,000 for any statutory contravention where no specific penalty is explicitly provided elsewhere in the Act. Because the GST Act does not prescribe a dedicated, standalone penalty section for GSTR-9 failures, invoking Section 125 alongside the late fee is perfectly legal. (In favor of revenue)

• Writ Dismissed: Finding no legal infirmity or jurisdictional error in the original adjudication order, the High Court refused to interfere and dismissed the petitioner’s writ.

Key Takeaways

• No Loophole for Total Defaulters: Taxpayers cannot avoid the accumulation of statutory late fees by simply choosing to never file a missing return. A late fee accumulates daily from the expiration of the due date until the error is rectified or quantified by an assessment order.

• Late Fee vs. Penalty: A late fee (Section 47) is a mechanical, compensatory charge for the delay in submission, whereas a general penalty (Section 125) is a punitive measure for violating a statutory command. They are distinct legal remedies and can be applied simultaneously to the same compliance failure.

• Residuary Power of Section 125: Section 125 serves as a catch-all safety net for the Revenue. If a taxpayer breaches any rule or section within the GST framework—and that specific section lacks its own unique penalty sub-clause—the department is fully empowered to attach a general penalty of up to ₹25,000.