Penalty of Rs. 23.40 lakh set aside where entire tax of Rs. 2.34 crore on omitted B2C sales was paid through DRC-03 before show cause notice; interest to be recomputed under Rule 88B: GSTAT Lucknow

The Tribunal held that Section 73(5) and 73(6) apply where tax is voluntarily discharged on self-ascertainment before notice, and that interest must be computed after considering ledger balances as required by Section 50 and Rule 88B.

The Goods and Services Tax Appellate Tribunal, Lucknow Bench, has set aside a penalty of Rs. 23,40,000 and the existing interest computation of Rs. 75,23,100 against a trader who had voluntarily paid the entire tax before any notice was issued [M/s Aditi Enterprises v. Joint Commissioner (IT), State Tax Headquarters, Lucknow].

The Bench of Narendra Kumar (Judicial Member) and Alok Chopra (Technical Member) noted that certain B2C sales of FY 2020-21 were omitted from GSTR-1 and GSTR-3B due to a clerical error but were disclosed in GSTR-9 and 9C, and that tax of Rs. 2.34 crore was paid through DRC-03 on 04.03.2022. The Department had verified the reconciliation and did not dispute the turnover.

The Tribunal held that Section 73(5) applied, and that imposing penalty merely for inadvertent non-reporting in monthly returns was unjustified when the entire liability had been discharged before the notice. The penalty was set aside under Section 73(6).

On interest, the Tribunal directed the proper officer to recompute the liability strictly under Section 50 read with Rule 88B, taking into account the balances in the electronic ledgers, with the appellant liable only for the amount found actually payable.

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