2026-VIL-267-GSTAT-BLR
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SGST Tribunal

GST - Applicability of Section 76 of the CGST Act, 2017 to registered supplier who collected tax under valid invoices but filed nil or no returns – Respondent-assessee supplied taxable services to a Government recipient for about three years, issued tax invoices charging GST, collected the tax and filed nil or no GSTR-3B returns, which was detected on cross-verification of returns filed by the recipient - SCN under Section 76 was followed by an order confirming tax, interest and equal penalty - Respondent having paid the admitted tax through voluntary DRC-03 challans during adjudication - FAA corrected the appropriation but set aside the penalty holding that Section 76 does not apply to registered suppliers who default on admitted tax collections - Whether Section 76 applies to a registered supplier who collected tax under valid invoices and did not remit it, so that the penalty under Section 76 is sustainable - HELD - Section 76(1) applies to every person who has collected any amount as representing the tax and has not paid it to the Government, irrespective of whether the supplies are taxable or not. The expression ‘any amount’ is of the widest amplitude and includes tax collected by a registered person under valid invoices and withheld by non-remittance through returns. Reading it to exclude registered suppliers would create an anomalous immunity for registered defaulters over unregistered ones – Term ‘every person’ in Section 76 includes both unregistered persons and registered taxpayers who collected tax and did not remit it - An assessee collecting tax does so in a fiduciary capacity as custodian for the State, and retaining such collections while filing nil returns breaches that trust - The finding of the FAA that Section 76 excludes registered suppliers is legally unsustainable. The portion of the Order-in-Appeal setting aside the penalty is set aside, the penalty equal to the tax under Section 76 is restored and confirmed - The appeal of the Department is allowed
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