In a recent case, the Calcutta High Court set aside the demand for late fees since the non-furnishing of the return was due to the cancellation of registration.
M/s. Modicum Enterprise (OPC) Private Limited, the appellant was a registered dealer under the provisions of the Central Goods and Services Tax Act, 2017. The registration was cancelled on the ground that the appellant was a non-existing dealer. The appellant/writ petitioner preferred the appeal before the Senior Joint Commissioner of State Tax, Howrah Circle and by an order dated 22nd July 2022, the appeal was allowed and a clear finding has been rendered by the appellate authority that the ground on which the cancellation was made, was incorrect.
The cancellation of the registration was revoked by an order dated 27th January 2020 and the registration was restored. When the appellant attempted to file his returns, there is a demand of Rs.5,000/- per return stating that it is a late fee payable under Section 47 of the Act.
In terms of sub-Section (1), any registered person, who fails to furnish a return by the due date shall pay a late fee of 100 rupees every day during which such failure continues subject to a maximum amount of Rs.5,000/-. Sub-Section (2) states that any registered person, who fails to furnish the return required under Section 44 is also required to pay such late fee.
It was observed that the reason for non-furnishing the return is the cancellation of the registration on the ground that the appellant is a non-existing dealer.
A two-judge bench comprising Justice T S Sivagnanam and Justice Hiranmay Bhattacharyya held that “the demand of late fee from the appellant @ Rs.5,000/- per return is without jurisdiction and not tenable in the eye of law. It is pointed out by the learned Advocate appearing for the official respondents that unless the appropriate direction is given to the concerned respondent, the appellant will not be able to electronically file its return.”
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