Facts of the case:

In this case, the impugned order was passed on the ground that the petitioner had failed to file the annual return under Section 44 of the GST Act. On account of such default, the respondent levied Late fee under Section 47 and General penalty under Section 125 of ₹25,000/- CGST and ₹25,000/- SGST (total ₹50,000/-). Pursuant to the impugned order, the petitioner’s bank account was frozen, prompting the present writ petition seeking quashing of the order on the grounds of lack of jurisdiction, violation of principles of natural justice, and illegal levy of penalties, along with a consequential direction to defreeze the bank account.

The petitioner contended that Section 47 provides only for levy of late fee, and once late fee is levied thereunder, Section 125 (general penalty) has no application. It was also argued that the late fee had been erroneously calculated. Reliance was placed on a recent judgment of the same Court.

Issue:

The petitioner contended that Section 47 provides only for levy of late fee, and once late fee is levied thereunder, Section 125 (general penalty) has no application. It was also argued that the late fee had been erroneously calculated. Reliance was placed on a recent judgment of the same Court. Whether the calculation of late fee under Section 47(2) by the respondent was legally sustainable.

Held that:

The Court held that Section 125 of the TNGST Act applies only in cases where no specific penalty is provided under the Act. Since Section 47 specifically governs the consequence of non-filing of returns by way of late fee, the levy of general penalty under Section 125 was impermissible. Accordingly, the general penalty of ₹50,000/- was quashed.

With respect to the late fee, the Court examined Section 47(2) and held that the respondent had misinterpreted the provision. The late fee payable is required to be calculated at ₹100 per day or 0.25% of turnover, whichever is higher, and the total amount so arrived at must then be equally apportioned between CGST and SGST. The respondent had wrongly treated ₹75,025/- as payable separately under CGST and SGST.

The Court modified the computation and held that the total late fee payable would be ₹75,025/-, split equally as ₹37,512.50/- CGST and ₹37,512.50/- SGST.

Regarding the freezing of the bank account, the Court directed that upon payment of the corrected late fee amount, the concerned branch of the State Bank of India shall defreeze the petitioner’s bank account and permit its operation.

Accordingly, the writ petition was partly allowed. 

Case Name: Tvl RPG Traders, Rep. by its Proprietor R.P. Govindarajan Versus The State Tax Officer, The Branch Manager, Tiruvarur. dated 12.12.2025