• Dated 26^th May, 2026

Simultaneous Levy of Late Fee under Section 47 and General Penalty under Section 125 for delayed filing of Annual Return Held Impermissible

Brief Facts

Various taxpayers who filed Annual Returns in Form GSTR-9 after the prescribed due date were subjected to:

• Late fee under Section 47(2) of the CGST Act, 2017; and
• General penalty under Section 125 of the CGST Act, 2017

for the very same default of delayed filing of Annual Return. The principal issue before the Court was whether both late fee and general penalty could be imposed simultaneously for the same contravention.

Assessee's Contention

The assessee contended that Section 47 specifically prescribes late fee for delayed filing of Annual Returns and therefore the Department cannot additionally invoke Section 125 for the same default as section 125 is merely a residual/general penalty provision applicable only where no separate penalty is prescribed under the Act.

The assessees further submitted that although Section 47 uses the expression "late fee", the levy is essentially penal in nature since it arises only upon default, operates as a deterrent and is intended to ensure statutory compliance. Accordingly, imposition of both late fee and general penalty for the same lapse amounts to double penalization which is impermissible in law.

Department's Contention

The Department argued that late fee under Section 47 and general penalty under Section 125 operate independently and therefore both can be imposed simultaneously. It was further argued that delayed filing of the Annual Return constitutes a contravention of the statutory provisions of the CGST Act, thereby attracting the general penalty under Section 125 in addition to the late fee specifically prescribed under Section 47.

Court Held

The Hon'ble Madras High Court observed that the levy under Section 47, though termed as "late fee", is substantially penal in character as it is imposed only upon default, acts as a deterrent, lacks quid pro quo and is intended to enforce future compliance. Accordingly, once late fee under Section 47 has already been levied for delayed filing of Annual Return, invocation of Section 125 for the same default is legally impermissible as it would amount to double penal consequences for a single contravention. The Court therefore set aside the general penalty imposed under Section 125 while upholding the liability towards late fee under Section 47(2).

BTA Comment

The ruling is a significant relief for taxpayers facing simultaneous levy of late fee and general penalty for delayed filing of Annual Returns under GST law. The judgment reaffirms the well-established legal principle that a specific statutory provision overrides a general provision. It also upholds the broader doctrine against double penalization for the same contravention. This decision is expected to substantially strengthen taxpayer positions in similar disputes and pending litigations across various jurisdictions.

Case Reference

Kandan Hardware Mart v. Assistant Commissioner (ST) (FAC), Chennai, W.P. Nos. 27029 of 2024 and decided on 2-1-2026.

Author: Noor Jahan

Edited by: Sneha Nandi