The Madras High Court held that where delay in filing GST returns is specifically covered by late fee under Section 47, a separate general penalty under Section 125 cannot be imposed.

CASE UPDATE - GST

HIGH COURT OF MADRAS

CAUSSA TEC SOLUTIONS (P.) LTD. v. ASSISTANT COMMISSIONER (ST)

W.P. NO. 16991 OF 2026

W.M.P. NO. 18303 & 18304 OF 2026

• Background / facts: The petitioner challenged an order dated 26.11.2025 passed pursuant to a DRC-01 show cause notice dated 03.01.2025. The notice proposed levy of late fee and general penalty under the CGST and TNGST laws for delayed GST return compliance. The confirmed demand comprised penalty of ₹25,000 each under CGST and SGST, and late fee of ₹95,498 each under CGST and SGST, aggregating to ₹1,20,498 under each enactment.

• Proceedings before GST authorities: The proper officer recorded that the petitioner did not respond to the DRC-01 notice and also failed to appear for personal hearings fixed on 20.01.2025, 28.08.2025, 07.11.2025 and 18.11.2025. In the absence of any reply or appearance, the proposal was confirmed under Section 73 of the TNGST Act, 2017, including both late fee and general penalty.

• High Court reasoning: The High Court noted that the issue was covered by its earlier decision in KANDAN HARDWARE MART v. ASSISTANT COMMISSIONER (ST) (FAC), [2026] 182 taxmann.com 632 / 114 GST 267 (Madras), W.P. No. 27029 of 2023, order dated 02.01.2026. Relying on that decision, the Court held that Section 125 is a residual general penalty provision and can apply only where no other penalty or statutory levy is specifically provided. Since delayed filing of returns is specifically addressed through late fee under Section 47 of the respective GST enactments, the department could not superimpose general penalty under Section 125 for the same default.

• Final ruling: The writ petition was partly allowed. The Madras High Court set aside the imposition of general penalty under Section 125 of the TNGST Act, 2017. However, the petitioner remained liable to pay the late fee, which was directed to be paid within 30 days from the date of receipt of the order, if not already paid. No costs were awarded and connected miscellaneous petitions were closed.

• Key principle: Where GST law specifically levies late fee for delayed filing of returns under Section 47, the residual general penalty under Section 125 cannot be invoked for the same default. This view is consistent with earlier Madras High Court rulings, including:

1. KANDAN HARDWARE MART v. ASSISTANT COMMISSIONER

   Once late fee is levied for belated GST returns, additional general penalty under Section 125 cannot be imposed.

   
   

2. TVL. JAINSONS CASTORS & INDUSTRIAL PRODUCTS v. ASSISTANT COMMISSIONER

   Late fee under Section 47 was held to be penal in nature and specifically provided for delayed filing; therefore, Section 125 could not be invoked.

   
   

3. TVL. RPG TRADERS v. STATE TAX OFFICER

   The Court quashed the general penalty of ₹50,000, observing that Section 125 applies only where no penalty is leviable under Section 47.