Section 128A Waiver Cannot Be Refused Because the Demand Covers Another State: Madras High Court

Where one order under Section 73 covered demands for Tamil Nadu and Maharashtra, the Madras High Court has held the officer who passed it cannot refuse to decide the Section 128A waiver for the out-of-State part.

The Madras High Court has set aside the rejection of a waiver application under Section 128A of the CGST Act where a single order-in-original covered demands for two States.

Indian Bank was assessed under Section 73 by one proper officer, in an order covering both its Tamil Nadu and its Maharashtra operations. When the bank applied for waiver of interest and penalty under Section 128A, the officer declined to consider the Maharashtra portion on the footing that it fell outside his jurisdiction.

The Court held that rejection was unsustainable. Neither Section 128A nor Rule 164 of the CGST Rules stops the officer who passed a common order from deciding a waiver application covering every demand in that order, and no other officer had been designated to do it. The bank had met the statutory conditions: the application was filed within time and the tax was paid before the cut-off date. The rejection was set aside and the matter remitted for fresh consideration after hearing the bank.

What this means for you: if you were assessed in a single order spanning registrations in more than one State, and a Section 128A application was refused for the out-of-State part on jurisdiction grounds, that refusal is open to challenge. Check your limitation before acting.

Madras High Court judgments are at https://www.mhc.tn.gov.in/judis/ and CBIC's circular on the Section 128A waiver procedure at https://cbic-gst.gov.in/pdf/circular-238-32-2024-GST.pdf

Topics:section 128AGST amnesty waiverrule 164multi state order in originalsection 73 demandMadras High Court GSTinterest and penalty waiverIndian Bank GSTChennai GSTTamil Nadu GST

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