The GST Appellate Tribunal, Bengaluru restored a ₹1,19,04,300 demand and equal penalty under Section 76 against a company that declared tax in GSTR‑1 and collected it from buyers without paying it to Government.
Section 76 of the CGST Act is not confined to composition dealers, unregistered persons or exempt supplies; it reaches a registered person who collects tax from buyers and keeps it [Nagamangalamurthy Ganesh Kumar v. Harji Engineering Works Pvt. Ltd., 2026-juristway.com-3199-GSTAT(Bengaluru)-GST].
The department’s appeal under Section 112(3) was heard by Sudha Koka, Member (Technical), who wrote the order, and Srikanth Venkatraman, Member (Judicial).
The Ballari company filed GSTR‑1 returns for March to November 2019 declaring tax of ₹1,19,04,300 but filed no GSTR‑3B and paid nothing. Its registration was cancelled on 20 Nov 2019 under Section 29(2)(c), and it began filing GSTR‑3B returns only on 7 Oct 2020.
An SCN under Section 76(1) followed. The order dated 11 Oct 2021 confirmed the demand with interest, appropriated ₹55,19,464 paid in cash, and treated ₹63,84,836 debited from the credit ledger as irregular under Section 16(4). It imposed an equal penalty under Section 76(2).
On 20 Jun 2023, the appellate authority set aside that order, holding that non-payment of self-assessed tax by a registered person falls under Section 73 or 74, not Section 76.
The company did not appear despite four notices and a notice affixed at its address. The department reported that the unit had shut down. Citing Sangram Singh v. Election Tribunal (AIR 1955 SC 425) and Collector of Customs v. K.A. Anwar (1998 (104) E.L.T. 3 (S.C.)), the Tribunal proceeded ex parte.
The Tribunal relied on the non-obstante clause in Section 76(1), which covers every person who has collected “any amount as representing the tax under this Act” and not paid it. It called this wording “expansive, absolute, and all-encompassing” and held that the appellate authority had wrongly read it down.
It drew support from R.K. Transport Private Limited v. Union of India (2022 (64) G.S.T.L. 308 (Chhattisgarh HC)) and GAIL (India) Limited v. Commissioner of C.Ex. (2016 (44) S.T.R. 384 (MP HC)). Bank records showed remittances of more than ₹3.24 crore from M/s Corrtech International Limited against the very invoices that carried the tax.
The Tribunal also upheld the denial of time-barred credit, holding that delayed GSTR‑3B returns do not revive the right to use ITC beyond the Section 16(4) deadline.
The appeal was allowed, the appellate order set aside, and the original order restored in its entirety.
2026-juristway.com-3199-GSTAT(Bengaluru)-GST
