M/S. SRIBA NIRMAN COMPANY
V.
THE JOINT COMMISSIONER (APPEALS) & ORS.
W.P. NO. 25826 OF 2023
DATED: JANUARY 29, 2025
HIGH COURT: ANDHRA PRADESH
Facts: The Petitioner is a partnership firm carrying on business of works contract, executing infrastructure based Engineering Procurement Construction contracts. The petitioner in the month of March, 2018,raised nine invoices with aggregate value of Rs.20,92,02,422/- inclusive of GST of Rs. 3,19,12,234/-.Due to insufficient payments from the customer/client, the Petitoner could not pay GST or file the monthly return in Form GSTR- 3B within statutory time limit. Following inspection by DGGI officers, the Petitioner relaized his mistake and deposited Rs.3,36,51,468/- in 4 instalments and filed all pending returns. Despite these payments, a show cause notice under Section 74 of the CGST Act ,demanding tax , interest and penalty and subsequently the demand of penalty amount was confirmed by the department . Being aggrieved, the.Petitioner filed an appeal wherein, the demand of penalty imposed upon the Petitioner was upheld. 2017. Hence, the present petition has been filed contending that the provisions of Section 74 of the CGST Act, could not have been invoked solely based on the Petitioner non-payment of GST taxes and such non-payment cannot be considered as fraud or intentional misstatement or suppression of facts to evade tax.
ISSUES: Whether penalty under Section 74(1) of the CGST Act can be levied, along with other penalties merely on grounds of non-payment of GST & non-filing of returns ? Whether the Act of the Petitioner amounts to fraud, wilful misstatement and suppression of facts?
Held : Noted that there has been a failure, on the part of the petitioner, in filing monthly returns and making payment of tax under the said monthly returns which may not amount to fraud or misstatement. Moreover, the suppression of fact would have to be wilful suppression of facts.
Observed that the appellate authority had held that that there was wilful suppression as the Petitioner had been paid certain amounts by its client and as such, there was no impediment for the Petitioner to remit the necessary taxes and consequently upheld the demand of penalty, and therefore, it is difficult to accept the contention, of the Petitioner, that there was no wilful intention to suppress facts.
The court dismissed the writ petition and held that such non-filing and non-payment subject to the requirement of making out a case of fraud, wilful misstatement or suppression of fact, would be sufficient for invoking Section 74 of the CGST Act. The other penalties levied against Petitioner are natural corollaries of above finding and do not require any further consideration.
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