2026-VIL-1231-GUJ
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SGST High Court Cases

GST - Waiver of interest and penalty under Section 128A of the CGST Act, 2017 - Effect of adjustment through Form GST DRC-03A of a payment made earlier through Form GST DRC-03 - Petitioner paid an amount through Form GST DRC-03 towards reversal of ITC for the relevant year, but inadvertently mentioned the following financial year in the form. The Order-in-Original under Section 73 declined to give credit for it - After Rule 142(2B) was inserted, the Petitioner filed applications in Form GST DRC-03A, which were accepted on the portal and reduced the outstanding principal tax liability to nil, and then applied in Form GST SPL-02 under Section 128A. The competent authority rejected the application on the ground that the payment could not be treated as payment towards the tax liability of the relevant year - Whether the competent authority, while considering the application under Section 128A, could disregard the adjustment effected through Form GST DRC-03A that was accepted on the portal and reduced the principal tax liability to nil - HELD - The material precondition for the waiver of interest and penalty under Section 128A is payment of the entire principal amount of tax covered by the demand. Under Rule 142(2B), an amount paid through Form GST DRC-03 is credited in the Electronic Liability Register against the demand as if it was paid on the date of the original intimation - The second proviso to Rule 164 and the Circular on Section 128A contemplate that such payment is adjusted through Form GST DRC-03A before filing the application in Form GST SPL-02. Under Section 49(7) and Rule 85, the Electronic Liability Register records the liabilities and is credited on payment towards a demand - The Respondents did not dispute that the payment was made and received. The Petitioner had consistently explained the mention of the wrong financial year as an inadvertent error and had furnished annual returns showing no outstanding liability for that year. The authority rejected the application without verifying these facts and without considering the legal effect of the adjustment reflected as nil in the Electronic Liability Register – The impugned order was passed without proper application of mind and set aside. The Respondent is directed to accept and process the application in Form GST SPL-02 and pass the consequential order in accordance with law – The petition is allowed
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