2026-VIL-867-MAD
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SGST High Court Cases

GST - Section 128A - Amnesty Scheme - Applicability to Self-Assessed Tax - Interpretation of Section 128A in relation to Section 75(12) of the CGST Act, 2017 - Petitioners applied for waiver of interest or penalty under Section 128A in respect of demands relating to belated filing and payment of GSTR-3B returns containing self-assessed tax - Revenue contended that Section 128A by necessary implication excludes cases falling within the scope of Section 75(12) relying on the non obstante clause in Section 75(12) and Circular No.238 - Whether Section 128A applies to self-assessed tax or is impliedly excluded from its scope - HELD – The Section 128A opens with a wider non obstante clause than Section 75(12) reading "notwithstanding anything to the contrary contained in this Act" and if Parliament intended to exclude self-assessed tax from Section 128A, it would have inserted a qualifying phrase such as "other than cases falling within Section 75(12)" similar to the exclusion in Section 80. The absence of such exclusion coupled with the width of the non obstante clause indicates Parliament did not intend to exclude self-assessed tax from Section 128A - The initiation of proceedings under Section 73 is a sine qua non for filing an application under Section 128A and once the Revenue decides to determine liability under Section 73, whether in relation to self-assessed tax or otherwise, it is open to the taxable person to file an application under Section 128A. The Circular No.238 cannot curtail the scope and ambit of the statute as a Circular issued by CBIC cannot override statutory provisions. The Explanation to Section 75(12) is not applicable to proceedings pertaining to the period from 01.07.2017 to 31.03.2020 - The implied exclusion of cases relating to self-assessed tax cannot be read into Section 128A and petitioners are entitled to waiver benefits under Section 128A if they satisfy the substantive conditions thereof – Ordered accordingly - Time Limits under Rule 164 of the CGST Rules, 2017 - Mandatory or Directory - Petitioners applied for waiver of interest and penalty under Section 128A but some applications were filed after the stipulated deadline of three months from the notified date - Revenue contended that the time limit prescribed in sub-rule (6) of Rule 164 is directory in nature and not mandatory and the doctrine of substantial compliance applies - Whether the time limits prescribed in Rule 164 are mandatory or directory - HELD – The Sub-rule (6) opens with the phrase "Any person who wishes to file an application" which shows the taxable person has an option of filing or not filing the application, however if the taxable person opts to file such application the time limit becomes applicable. Upon holistic consideration of Rule 164, the entire process of consideration and disposal of waiver applications is time bound with prescribed time limits for issuance of show cause notices under sub-rule (8), responses under sub-rule (9) and approval or rejection orders under sub-rule (13). Sub-rule (14) prescribes the drastic consequence of deemed approval and conclusion of proceedings if an order is not issued within the prescribed period. These are clear indications that the time limits form part of the substance of the scheme - The time limit for filing an application forms part of the substance and not a procedural or directory requirement. The doctrine of substantial compliance may apply to formal or procedural defects in filing the application but not to the substantive requirement of filing within the prescribed time limit. - The time limits prescribed in Rule 164 including that in sub-rule (6) are mandatory and not directory and applications filed after the expiry of the prescribed time limit are liable to be rejected - Void Orders - Conditions for Issuance - When can Form GST SPL-05 Approval Orders be declared Void - In some cases, the proper officer issued an order in Form GST SPL-05 accepting the waiver application and subsequently issued another order declaring the earlier Form GST SPL-05 order to be void on the ground that the applicant was not eligible for waiver under Section 128A - The petitioners contended that such void orders were issued without authority under the statute or rules - Whether approval orders issued in Form GST SPL-05 can be declared void by issuing a separate void order - HELD – The Sub-rules (16) and (17) of Rule 164 are the only provisions that prescribe when orders issued in Form GST SPL-05 or Form GST SPL-06 become void. Sub-rule (16) applies when the taxpayer fails to pay additional amounts of tax liability as per the second proviso to sub-section (1) of Section 128A within the prescribed time. Sub-rule (17) applies when the taxpayer fails to pay interest or penalty relating to erroneous refund or demands pertaining to periods other than 01.07.2017 to 31.03.2020 within three months from the date of issuance of the order in Form GST SPL-05 or SPL-06. Except in these situations specified in sub-rules (16) and (17), neither the statute nor the rule enables the issuance of a separate void order after accepting the application and issuing an order in Form GST SPL-05 – The issuance of void orders by invoking Section 161 or otherwise in circumstances other than those enumerated in sub-rules (16) and (17) is unauthorized and without jurisdiction – The void orders issued in cases where the conditions in sub-rules (16) and (17) do not apply are invalid and liable to be set aside and the original Form GST SPL-05 approval orders shall remain valid - Deemed Approval - Conclusion of Proceedings - Non-issuance of Order within Prescribed Time - Sub-rule (14) of Rule 164 prescribes consequences when proper officer fails to issue approval or rejection order within prescribed time - If application for waiver is not disposed of within the time limits specified in sub-rule (13) then the application shall be deemed to be approved and proceedings shall be deemed to be concluded - Whether deemed approval operates unconditionally or is subject to satisfaction of substantive conditions of Section 128A - HELD - The benefit of deemed approval and conclusion of proceedings under sub-rule (14) shall only accrue to an applicant for waiver who satisfies the substantive conditions stipulated in Section 128A. Any other construction would allow a subordinate legislation to override a provision in the parent statute which is impermissible. The deemed approval operates as an incentive for the proper officer to expedite disposal and for taxpayers to file applications within the prescribed time and satisfy the substantive requirements of Section 128A – The applications shall be deemed to be approved and proceedings concluded only when the applicant has complied with all substantive conditions of Section 128A and the proper officer fails to issue an order within the prescribed time limit.
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