Madras HC Remands GST Amnesty Claim Under Section 128A Pending Larger Bench Ruling
Case Overview: Tvl Annai Enterprises Vs Deputy State Tax Officer (Madras High Court)
The Madras High Court recently adjudicated upon a writ petition filed by the assessee challenging an order dated 13.08.2025, through which the assessee's application submitted in Form GST SPL-02 on 15.03.2025 had been rejected by the Deputy State Tax Officer. The core dispute revolved around the denial of the benefit under the GST Amnesty Scheme, specifically under Section 128A of the Central Goods and Services Tax Act, 2017, in relation to interest and penalty demands arising from self-assessed tax liabilities.
Background of the Dispute
Nature of the Demand and Rejection
The interest and penalty in question had been levied upon the assessee under Section 50 and Section 73(9) of the Tamil Nadu Goods and Services Tax Act, 2017. The rejection order issued by the respondent authority relied upon Circular No. 238/2024 dated 15.10.2024, specifically referencing Table No. 4 of the said circular.
The relevant portion of the impugned order read as follows:
"However, the benefit of waiver of interest and penalty shall not be applicable in the cases where the interest has been demanded on account of delayed reporting of any supply in the return, as such interest is related to demand of interest on self-assessed liability and does not pertain to any demand of tax dues and is directly recoverable under sub-section (12) of section 75."
In essence, the department took the position that since the interest demand arose from delayed reporting of a supply in the return — attributable to self-assessed liability — it fell outside the purview of the amnesty benefit. The authority further noted that the assessee, despite being given adequate opportunity to appear and present its case, had failed to attend the proceedings and prosecute the application.
What Actually Happened at the Assessee's End
A crucial factual detail placed before the High Court was that the assessee had indeed disclosed the tax liability in GSTR-1, but had not discharged the corresponding tax payment while filing the monthly GSTR-3B returns. This discrepancy between GSTR-1 and GSTR-3B filings formed the basis for the assessment proceedings. An Assessment Order dated 09.06.2023 had already been passed against the assessee under Section 73 of the respective GST enactments, which triggered the subsequent demand for interest and penalty.