The High Court of Kerala in the case of M/S. Global Plasto Wares Versus Assistant State Tax Officer vide Order No. WP(C) NO. 33787 OF 2023 dated 17.10.2023, has held that the penalty is payable on failure to deposit the tax collected by him within a period of thirty days from the due date of the payment of the tax.

In this case, the petitioner has paid all taxes within thirty days from the date of the notice. The notice is dated February 28, 2022, and the petitioner paid the tax on March 10, 2022. 

The assessee relied on Section 73(8) of the GST Act, 2017. In view of the express provision that if an assessee or person chargeable with tax under Section 73(1) or (3) of the GST Act, 2017 paid the tax along with the interest payable under Section 50 within a period of thirty days of the issue of notice, no penalty shall be payable, and all proceedings in respect of the notice would be deemed to be concluded. 

The department contended that Sub-section (8) of Section 73 comes into play when an assessee has not paid the tax on the transactions. But where the assessee has collected from the others and not credited it to the government, It is sub-section (11) of Section 73 that comes into play. Sub-section (11) of Section 73 of the GST Act, 2017 begins with a non-obstante clause that provides that “notwithstanding anything contained in sub-section (6) or sub-section (8), a penalty under sub-section (9) shall be payable where any amount of self-assessed tax or any amount collected as tax has not been paid within a period of thirty days from the due date of payment of such tax”.

The issue raised was whether an assessee who had paid the tax within thirty days of the issue of notice along with interest would be held liable for a penalty. 

The Court observed that in Sub-sections 6, 8, and 9 of Section 73 of the GST Act, 2017, it is provided that if a person chargeable to tax fails to deposit the tax collected by him within a period of thirty days from the due date of the payment of such tax, Sub-section 8 will not have any effect, and such a person is liable to pay a penalty.

The court, however dismissed the petition of the assessee.