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Rules Cannot Decline Multi-State GST Waiver for
A Tax Relief Case Across State Lines
In a definitive stance on the procedural reach of GST waiver provisions, the held that a "" cannot sidestep a merely because the original demand order pertains to multiple states. The Court partly set aside the rejection of 's claim under , in respect of its Maharashtra operations, and the matter for fresh consideration.
The Background: One Order, Two States, Conflicting Jurisdiction
On , an was issued under against for both its Chennai and Maharashtra establishments. The Bank attempted to challenge the Maharashtra component before the Commissioner (Appeals) in Mumbai, but that appeal was thrown out on with a direction that the Bank should approach the authorities in Chennai.
When the Bank filed a under Section 128A in Form GST SPL-02 on , the authorities granted the waiver for the Tamil Nadu portion but rejected the Maharashtra claim. The official rationale was that the officer lacked the competence to waive interest and penalty for the Bank's activities outside its .
Arguments from Both Sides
Representing , advocates and argued that the application was correctly filed before the officer who had issued the original demand order. They contended that neither Section 128A nor placed any prohibition on that officer from considering the relief, even for a multi-state claim.
The revenue authorities, represented by Senior Standing Counsel , relied on Circular No. 238/32/2024-GST. They submitted that a Form GST SPL-02 application can be correctly considered only by a "", who in this context would be the officer responsible for under . This was the framing for the refused maritime portion.
The Court's Analysis: No Room for a Jurisdictional Veto
The High Court observed that while Circular No. 238 and the explanation to Rule 164 do link the waiver officer to the recovery officer under Section 79, the critical question is who that officer is when a single demand order is spread over two states. The Court noted did find that neither the preparation nor the rules clearly designate a different officer for such a layered claim.
Importantly, Rule 164 contemplates a single , not separate filings per state. Moreover, the Bank's original demand was a combined order under Section 73, which creates no separate designation for each state. In these circumstances, the Court ruled that the cannot use jurisdictional lack as a shield.
Key Observations
"Considering all these aspects, having issued the combined order under Section 73 in respect of both Chennai and Maharashtra locations, there is no statutory basis for the to decline to exercise jurisdiction in respect of waiver with regard to Maharashtra."
The Decision
The was allowed in part. The impugned order (Form GST SPL-05 dated ), insofar as it rejected the Maharashtra waiver claim, was set aside. The matter was to the , who may now proceed with fresh adjudication, ensuring receives a fair hearing before any further decision.
This ruling resolves the liquidity of the "" concept in multi-state tax administration. It confirms that the waiver mechanism under Section 128A is designed as a single-window process, and an officer (holding a composite distinct demand) cannot be the municipal power only to one part of same order. The case is now sent to the officer concerned and any order on merits will follow after giving the Bank a proper opportunity.
There is no order as to costs, and the connected miscellaneous petitions were closed.
