Madras High Court Confirms GST Late Fee Liability for Delayed Annual Return Filing

Background of the Dispute

The Division Bench of the Madras High Court in Tvl. New Shivsakthi Traders Vs Assistant Commissioner (ST) dealt with a challenge to levy of late fee on delayed filing of GST returns under the Tamil Nadu Goods and Services Tax Act, 2017.

The assessee had filed a writ appeal, W.A.(MD) No. 956 of 2026, questioning the correctness of the order passed by the learned Single Judge on 20.08.2026 in W.P.(MD).No.22746 of 2025, which had upheld an assessment order dated 17.04.2025 issued under Section 73(1) of the Tamil Nadu Goods and Services Tax Act, 2017. The disputed tax period related to the financial year 2021–2022 (noted in the judgment as between 2000–2022 in one place, but clearly dealt with as 2021–2022 in substance).

The core issue in the writ appeal was whether non‑issuance of notice in Form GSTR-3A under Section 46 read with Rule 68 and alleged non-compliance with Circular No.129/19-GST dated 24.12.2019 could invalidate the levy of late fee under Section 47(2) for belated filing of returns under Section 44.

Proceedings Before the Single Judge

Grounds Raised by the Assessee

Before the learned Single Judge, the assessee argued:

  • The show cause notice leading to the assessment under Section 73(1) had been issued:

    • Without first issuing notice in Form GSTR-3A as contemplated under Section 46 of the Tamil Nadu Goods and Services Tax Act, 2017 read with Rule 68 of the Goods and Services Tax Rules.
    • Contrary to paragraph 4 of Circular No.129/19-GST dated 24.12.2019 issued by the Central Board of Indirect Taxes and Customs.

  • On this foundation, the assessee contended that:

    • The late fee imposed under the Tamil Nadu Goods and Services Tax law was not sustainable in law.
    • Such levy was liable to be set aside on account of procedural lapses in initiating the proceedings.

Findings of the Single Judge

The learned Single Judge examined the statutory framework and the factual background and concluded:

  1. The dispute related to the assessment year 2021–2022.
  2. The assessee had failed to file the relevant return within three years, even by the time the matter was heard.
  3. Even assuming that a notice in Form GSTR-3A had been issued under Rule 68, this would not absolve the assessee from liability to pay late fee under Section 47(2).

The Single Judge specifically relied on the text of Section 47(2), which provides that:

Any registered person who fails to furnish the return required under Section 44 by the due date shall be liable to pay a late fee of ₹100 per day during which such failure continues, subject to a maximum of an amount calculated at a quarter percent of his turnover in the State or Union territory.

On that reasoning, the learned Single Judge held that:

  • Statutory liability to pay late fee arises automatically upon failure to file returns within time.
  • Procedural irregularities in issuance of reminders or notices do not, by themselves, erase such liability.

Accordingly, the writ petition was dismissed, prompting the present writ appeal before the Division Bench.

Contentions in the Writ Appeal

Submissions on Behalf of the Assessee

In the writ appeal, the assessee broadened its attack by invoking the Standard Operating Procedure (SOP) for return filing under Section 39. The main contentions were: