GST Update

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Madras High Court Allows Reconsideration of GST Waiver Application

The Madras High Court has granted relief to Indian Bank in a dispute concerning the partial rejection of its application for waiver of interest and penalty under Section 128A of the CGST Act.

A common order dated March 21, 2023, was passed under Section 73 covering the bank’s GST operations in Tamil Nadu and Maharashtra. Indian Bank initially challenged the Maharashtra portion before the Commissioner (Appeals), Mumbai. However, the appeal was rejected on the ground that the bank should pursue the matter before the authorities in Chennai.

Indian Bank subsequently filed Form GST SPL-02 seeking waiver of interest and penalty after complying with the prescribed conditions. The proper officer accepted the application relating to the bank’s Tamil Nadu operations but refused to consider the Maharashtra portion due to lack of jurisdiction.

The bank argued that neither Section 128A nor Rule 164 of the CGST Rules prevented the officer who had passed the common demand order from considering the complete waiver application.

The Madras High Court observed that Rule 164 provides for a single waiver application. It also found that neither Section 79 nor the applicable GST Rules clearly identified any other officer responsible for deciding the Maharashtra component.

The Court held that when a common order under Section 73 covered operations in both States, the proper officer could not refuse to consider the Maharashtra portion merely on jurisdictional grounds.

Accordingly, the partial rejection was set aside, and the matter was sent back to the proper officer for fresh consideration after giving Indian Bank a reasonable opportunity of hearing.

LINK:CA. Praveen Sharma on Linkedin

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