Introduction

The petitioner, M/s Zyvana Integrated Services Pvt. Ltd., challenged the Order-in-Original dated 31.05.2023, whereby demands proposed under three separate show cause notices were confirmed. The primary grievance before the Madras High Court was against the imposition of 100% penalty under Section 74 of the CGST Act in respect of the first show cause notice dated 30.06.2022.

The dispute principally arose because although the petitioner had disclosed its outward taxable supplies in Form GSTR-1, it failed to report the corresponding tax liability in Form GSTR-3B within the prescribed time. The petitioner explained that the delay occurred because many customers had not paid the invoice amounts, resulting in financial difficulties. It contended that there was no suppression of facts or intention to evade tax, as the outward supplies were fully disclosed in GSTR-1 and the tax was subsequently discharged whenever payments were received.