Facts of the Case: M/s Ahsan Enterprises challenged an order dated 28.9.2024 imposing tax/penalty under the GST Act, 2017, and the First Appellate Order dated 24.9.2025. The petitioner submitted that an identical controversy had already been decided by the same High Court in M/s Techspa India vs State of U.P. (Writ Tax No. 1409 of 2025, decided 2.12.2025), where a penalty imposed under the residuary Section 125 for a default that properly fell under Section 47 (late filing of returns) was struck down as exceeding the statutory cap. Learned State Counsel fairly conceded that the present case was squarely covered by the Techspa India ruling.

Issues Involved:

  1. Whether a penalty imposed under the residuary Section 125 of the CGST Act, exceeding its statutory ceiling of Rs.25,000, can be sustained where the actual default (delay in filing returns) is specifically covered by Section 47.
  2. Whether an appellate rejection on limitation should stand where the underlying order is patently contrary to the statutory provisions.

Petitioner's Arguments:

  • Section 125 is a residuary clause, invocable only where a violation is not covered by any other specific provision of the Act; the maximum penalty under it is Rs.25,000, and reasons must be recorded for imposing it.
  • The alleged violation — non-filing of returns in time — is specifically covered by Section 47, carrying a maximum penalty of Rs.100 per day of delay up to Rs.5,000, not Section 125.
  • Imposing a Section 125 penalty, and that too beyond the prescribed limit, vitiates the order; the subsequent appellate rejection on limitation, without correcting this illegality, would perpetuate the error.

Respondent's Arguments:

  • Learned State Counsel fairly conceded that a penalty exceeding Rs.25,000 under Section 125 cannot be sustained as it is contrary to the statutory prescription, and that the case was squarely covered by the Techspa India ruling.

Court Order / Findings:

  • Following its reasoning in Techspa India, the Court held that a penalty for delayed filing of returns must be imposed under Section 47, not the residuary Section 125, and that an order invoking Section 125 while exceeding its prescribed limit is patently against the statutory provisions.
  • The impugned order dated 28.9.2024 and the appellate order dated 24.9.2025 were quashed and set aside; the matter was remitted to the concerned respondent to pass fresh orders after affording a full opportunity of hearing, without unnecessary adjournment.

Important Clarification:

  • A penalty for non-filing of GST returns in time must be levied under the specific provision — Section 47, capped at Rs.100 per day up to Rs.5,000 — and not under the residuary Section 125 (capped at Rs.25,000, with reasons required), which applies only where no other provision of the Act covers the default; an order to the contrary is patently illegal and cannot be salvaged merely because the assessee's appeal was time-barred.

Sections Involved:

  • Section 125, Central Goods and Services Tax Act, 2017 — general/residuary penalty provision, capped at Rs.25,000.
  • Section 47, Central Goods and Services Tax Act, 2017 — late fee for delayed filing of returns.

Decision – In Favour of: Assessee. Penalty and appellate orders quashed; matter remitted for fresh adjudication.

Related Case Laws: M/s Techspa India Thru Proprietor Mrs. Gulnaz Shahab vs State of U.P. (Writ Tax No. 1409 of 2025, Allahabad High Court, Lucknow Bench, decided 2.12.2025), on which the present ruling is directly based.

Case Details: High Court of Judicature at Allahabad, Lucknow Bench | Writ Tax No. 1583 of 2025 | Coram: Hon'ble Justice Manish Kumar | Date of Order: 15.12.2025.

Link to Download the Order: View/Download the Order

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