Facts of the Case

The petitioner, M/s New Shivsakthi Traders, Tuticorin, challenged an order dated 17.04.2025 passed under Section 73(1) of the Tamil Nadu Goods and Services Tax Act, 2017, along with the consequential FORM GST DRC-07, levying late fee under Section 47(2) for failure to file the annual return in FORM GSTR-9 for tax period 2021-22. The demand followed a show cause notice dated 06.12.2024. The petitioner contended that no notice in FORM GSTR-3A under Section 46 read with Rule 68 had been issued before the show cause notice, as required by CBIC Circular No. 129/2019, and that the late fee demand was accordingly bad in law before the Madras High Court, Madurai Bench.

Issues Involved

  1. Whether a notice in FORM GSTR-3A under Rule 68 of the TNGST Rules is a mandatory pre-condition before levying late fee for non-filing of the annual return under Section 44.
  2. Whether the late fee levied under Section 47(2) for delayed/non-filing of GSTR-9 was sustainable despite the alleged absence of a prior GSTR-3A notice.
  3. Whether the three-year outer limit under Section 44(2) for filing annual returns affected the taxpayer's liability for late fee.

Petitioner's Arguments

  • Without issuance of a notice in FORM GSTR-3A under Section 46 read with Rule 68 and without following CBIC Circular No. 129/19-GST dated 24.12.2019, the show cause notice for late fee itself was procedurally defective.
  • Since no GSTR-3A notice had been issued, the resultant late fee demand under Section 47(2) was liable to be interfered with.

Respondent's Arguments

  • The Additional Government Pleader defended the order, pointing out that the petitioner admittedly had not filed the annual return in GSTR-9 as required under Section 44 for the relevant tax period.

Court Order / Findings

  • The Court found no dispute that the petitioner had failed to file the annual return within the prescribed time, or even within the three-year outer limit under Section 44(2), despite having the option to file voluntarily.
  • Even assuming a GSTR-3A notice under Rule 68 had been issued, the petitioner would still remain liable to pay late fee under Section 47(2) for every day of continuing default, since the GSTR-3A notice mechanism and the late fee liability operate independently of each other.
  • Holding that there was no merit in the challenge to the impugned order, the Court dismissed the writ petition without costs and closed the connected miscellaneous petitions.

Important Clarification

  • Absence of a prior notice in FORM GSTR-3A does not absolve a registered person of late fee liability under Section 47(2) for failure to file the annual return within the time prescribed under Section 44.
  • The three-year outer limit under Section 44(2) is a cap on when a return may still be filed, not an exemption from the daily late fee that accrues for the period of default.
  • Late fee under Section 47(2) is capped at a quarter percent of turnover in the State/Union Territory, and this statutory cap, not procedural notice defects, is the taxpayer's primary safeguard.

Sections Involved

  • Section 44, Tamil Nadu GST Act, 2017 – mandates filing of the annual return, subject to a three-year outer limit under sub-section (2).
  • Section 47(2), Tamil Nadu GST Act, 2017 – levies late fee for failure to furnish the annual return by the due date, capped at a quarter percent of turnover.
  • Rule 68, Tamil Nadu GST Rules, 2017 – prescribes issuance of a GSTR-3A notice to non-filers of returns.

Decision – In Favour of

The decision is in favour of the Department. The writ petition challenging the late fee demand for non-filing of the annual return was dismissed as devoid of merit.

Case Details

Madurai Bench of the Madras High Court; W.P(MD)No.22746 of 2025 with W.M.P(MD)Nos.17791 and 17793 of 2025; M/s New Shivsakthi Traders vs The Assistant Commissioner (ST), Tuticorin-I; Coram: Justice C. Saravanan; Decided on 20.08.2025.

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