High Court Upholds Penalty Imposed on M/S. Global Plasto Wares under CGST/SGST Act

Case Name:

Writ Appeal No. 1874 of 2023 - M/S. Global Plasto Wares vs. Assistant State Tax Officer & Others

Key Takeaways:

1. The High Court upheld the penalty imposed on M/S. Global Plasto Wares under Section 73(11) of the CGST/SGST Act.
2. The appellant’s argument that the show cause notice did not specifically refer to Section 73(11) was not accepted by the Court.
3. The Court found that the appellant had not paid tax due to the State despite collecting the same from its customers, leading to the application of Section 73(11) for determining penal liability.

Case Synopsis:

A judgment from the High Court of Kerala at Ernakulam, dated 1st November 2023, regarding Writ Appeal No. 1874 of 2023. The case involves M/S. Global Plasto Wares as the appellant and the Assistant State Tax Officer, the State Tax Officer, and the Joint Commissioner of the State GST Department as the respondents.

The appellant, M/S. Global Plasto Wares, challenged the judgment dated 17th October 2023 of the learned Single Judge in the writ petition. The appellant was aggrieved by the imposition of a penalty of Rs. 40,000 under Subsection (11) of Section 73 of the Central Goods and Services Tax Act [CGST Act]/State Goods and Services Tax Act [SGST Act]. The penalty was imposed because the appellant had not paid the entire tax dues within 30 days from the date of the show cause notice that informed it of the fact that differential tax was due from it.

The appellant argued that the show cause notice did not specifically refer to the provisions of Section 73(11) of the CGST/SGST Act and proceeded on the assumption that the appellant was liable to a penalty under Section 73(8) of the CGST/SGST Act, which, on the facts of the case, did not apply. However, the learned Single Judge found that the Assessing Authority was correct in imposing the penalty under Section 73(11) of the CGST/SGST Act, and therefore, the writ petition was dismissed.

The appellant then filed a writ appeal, arguing that the learned Single Judge erred in confirming the demand of penalty which was impugned in the writ petition. The appellant contended that it was not open to the Assessing Authority to impose a penalty under Section 73(11) of the CGST/SGST Act as the show cause notice mentioned only the possibility of a penalty under Section 73(9) of the CGST/SGST Act.

However, the High Court, after hearing the arguments from both sides, upheld the judgment of the learned Single Judge and dismissed the writ appeal. The Court found that the appellant had not paid tax due to the State despite collecting the same from its customers, and therefore, the provision of Section 73(11) applied to determine the penal liability of the appellant.

In conclusion, the High Court upheld the penalty imposed on M/S. Global Plasto Wares under Section 73(11) of the CGST/SGST Act, and the writ appeal was dismissed.

FAQ:

Q1: What was the outcome of the writ appeal?

A1: The writ appeal was dismissed, and the penalty imposed on M/S. Global Plasto Wares was upheld by the High Court.

Q2: What was the appellant’s argument regarding the show cause notice?

A2: The appellant argued that the show cause notice did not specifically refer to the provisions of Section 73(11) of the CGST/SGST Act.

Q3: Why was the penalty imposed on the appellant upheld?

A3: The Court found that the appellant had not paid tax due to the State despite collecting the same from its customers, leading to the application of Section 73(11) for determining penal liability.