Nissi Cars v. Assistant Commissioner (ST): Madras HC on Section 125 Penalty vs Late Fee

This case study examines a Madras High Court writ petition in which a GST-registered dealer, M/s.Nissi Cars, challenged an assessment order imposing both a late fee under Section 47 and a general penalty under Section 125 of the GST enactments for delay in filing its Annual Return for the tax period 2019-2020, along with the consequential attachment of its bank account.

This page is a research summary of one specific Indian tax judgment, NOT legal advice. Always verify against the full judgment and consult a professional for case-specific guidance.

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The case at a glance

• Parties: M/S.Nissi Cars vs The Assistant Commissioner (St)(Fac)
• Bench: Madras High Court
• Date: 27 February 2026
• Court level: High Court
• Sections engaged: 47, 125
• Outcome: Taxpayer succeeded — the general penalty under Section 125 was set aside, the late fee under Section 47 in excess of Rs.10,000/- each under CGST and SGST was set aside, and the bank attachment stood automatically lifted.

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Facts of the case

The Petitioner, M/s.Nissi Cars, challenged an order dated 08.11.2023 in Form GST DRC-07, passed for the tax period 2019-2020, by which a Late Fee under Section 47 and a General Penalty under Section 125 of the respective GST enactments had been imposed. The order also triggered a consequential summary in Form GST DRC-07 and, later, a bank attachment notice in Form GST DRC-13 dated 21.01.2026 issued to the Petitioner's banker, Tamil Nadu Mercantile Bank Ltd.

The record shows the Petitioner had filed its Annual Return in GSTR-9 for the Tax Period 2019-2020 on 22.11.2022, which was before the cut-off date prescribed under Notification No.07/2023-CT dated 31.03.2023, as amended by Notification No.25/2023-CT dated 17.07.2023. The Petitioner had also already made a voluntary payment of Rs.20,000/- (Rs.10,000/- each under CGST and SGST) on 24.06.2023 in Form GST DRC-03 under the Amnesty scheme provided by those notifications, which payment was acknowledged by the Respondent's office in Form GST DRC-04 on 08.09.2025.

The Writ Petition was filed under Article 226 seeking a Writ of Certiorarified Mandamus to quash the impugned order and to direct the lifting of the bank attachment.

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Issues raised

• Whether a taxpayer who filed its GSTR-9 Annual Return before the cut-off date under the Amnesty Notifications (No.07/2023-CT and No.25/2023-CT) could still be subjected to Late Fee under Section 47 in excess of the amnesty-prescribed amount.
• Whether a General Penalty under Section 125 could be sustained where the taxpayer was already liable to, and had paid, a Late Fee under Section 47 for the same default.
• Whether the bank attachment issued through Form GST DRC-13 could survive once the underlying penalty and excess late fee demand was set aside.

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What the court held

The Writ Petition was allowed. The Court held that in view of its earlier decision in Ms.Kandan Hardware Mart Vs. The Assistant Commissioner (ST)(FAC) (W.P.No.27029 of 2023, order dated 02.01.2026), the imposition of Late Fee under Section 47 in excess of Rs.10,000/- each under CGST and SGST, and the General Penalty under Section 125, were both set aside, and the attachment of the Petitioner's bank account stood automatically lifted/vacated.

The Court's reasoning, drawn from the Kandan Hardware Mart precedent extracted in the order, was that a General Penalty under Section 125 can be imposed only in the absence of "any other penalty" under the GST enactments — since the Petitioner was already liable to (and had already paid) a Late Fee under Section 47, the further imposition of General Penalty under Section 125 for the same default "cannot be countenanced." The order also drew on the benefit of the Amnesty Notifications (No.07/2023-CT dated 31.03.2023, as amended by No.25/2023-CT dated 17.07.2023), extending that benefit to taxpayers, such as the Petitioner, who had filed their Annual Returns before the cut-off date, thereby capping the Late Fee exposure at Rs.10,000/- under each of CGST and SGST.

The Writ Petition was disposed of at the admission stage itself, with the consent of counsel for the Petitioner and the Government Advocate for Respondent No.1, without imposition of costs, and the connected Writ Miscellaneous Petitions were closed.

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Strategy observations

1. The Petitioner relied on documentary proof of timely GSTR-9 filing (22.11.2022) predating the Amnesty Notification cut-off, which was directly recorded by the Court as a material fact.
2. The Petitioner had already made a voluntary payment under the Amnesty scheme in Form GST DRC-03, acknowledged by the Department in Form GST DRC-04, which supported the argument that the Section 47 late-fee liability had already been discharged to the extent permissible.
3. The petition invoked a co-ordinate bench precedent, Ms.Kandan Hardware Mart Vs. The Assistant Commissioner (ST)(FAC), directly on the point that Section 125 general penalty and Section 47 late fee cannot both be imposed for the same default — this precedent was determinative of the outcome per the order.
4. The relief sought and obtained extended beyond quashing the penalty to a consequential direction lifting the bank attachment issued under Form GST DRC-13, illustrating how the writ addressed both the underlying demand and its enforcement consequence.
5. The matter was disposed of at the admission stage with consent of both counsel, reflecting that the legal issue was treated as already settled by the earlier Kandan Hardware Mart order.

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Why this case matters

This order is a direct application of the principle, first articulated in Ms.Kandan Hardware Mart Vs. The Assistant Commissioner (ST)(FAC), that a General Penalty under Section 125 of the GST enactments cannot be imposed where the taxpayer is already subject to a specific penalty — here, the Late Fee under Section 47 — for the same default. The reasoning treats Section 125 as a residuary provision applicable only in the absence of any other specific penalty, which has practical significance for a class of taxpayers who delayed filing GSTR-9 Annual Returns but did so before the cut-off date fixed under the relevant Amnesty Notifications.

The case also illustrates how such relief translates into consequential directions — here, automatic lifting of a bank account attachment — once the foundational penalty and excess late-fee demand are set aside, making it a useful reference point for similarly situated taxpayers facing overlapping Section 47 and Section 125 demands arising from delayed Annual Return filings.

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Source

This case is drawn from the TaxNoticeAI structured legal corpus (16,101 Indian tax judgments, CBIC circulars, ITAT rulings, AAR rulings, GSTAT rulings), sourced from indiankanoon.org and official court portals. Original document: https://indiankanoon.org/doc/40214236/