2026-VIL-196-BOM
  1. Home
  2. 2026-VIL-196-BOM

SGST High Court Cases

GST – Imposition of Personal Penalty under Section 122(1A) of the CGST Act, 2017 - The Petitioners, who were the Chief Financial Officer, Chief Executive Officer and Director & Joint Managing Director of the company imposed with penalties under Section 122(1A) of the CGST Act for the alleged wrongful availment and utilisation of input tax credit by the company - Whether the show cause notices and the impugned order-in-original imposing penalties on the petitioners under Section 122(1A) of the CGST Act are sustainable in law and within jurisdiction of the authorities – HELD - The Section 122(1A) of the CGST Act specifically applies to a 'taxable person' as defined under Section 2(107) of the CGST Act, namely who is liable to be registered under Section 22 or Section 24 of the CGST Act and who retains the benefit of the transactions covered under clauses (i), (ii), (vii) or clause (ix) of Section 122(1) and at whose instance such transactions are conducted. Unless such two-fold requirement is fulfilled, it would not be possible to recognize any jurisdiction being available in the proper officer to invoke the said provision - The petitioners, being employees of the company, cannot be considered as 'taxable persons' under the CGST Act – Further, the provisions of Section 122(1A) cannot be invoked against the petitioners who are merely employees of the company and not 'taxable persons' - The retrospective application of Section 122(1A) for the period prior to its effective date of 1st January 2021 would be in violation of Article 20(1) of the Constitution as a person cannot be penalized under the provision which was not in force for the period in which such alleged acts are stated to have been committed - the impugned show cause notices and order-in-original issued against the petitioners are quashed – The writ petition is allowed - Legislative intent of Section 122(1A) - The legislative intent of sub-section (1A) is quite clear, as necessarily clauses (i), (ii), (vii) or clause (ix) of sub-section (1) are required to be conjointly read with Section (1A), which itself stands incorporated in the provision. Hence, the opening words of sub-section (1A) when it uses the words “any person”, it would be required to be understood in the context of a ‘taxable person’ as sub-section (1) itself applies to a taxable person. In the absence of such interpretation, find it difficult as to how the provisions of clauses (i), (ii), (vii) or clause (ix) of sub-section (1) of Section 122 can at all apply, so as to give effect and/or in invoking/implementing the provision of sub-section (1A) of Section 122 of the CGST Act - It is clear from the facts of the case that an action was initiated against a company namely M/s. Shemaroo Entertainment Ltd. It is not in dispute that the petitioners who for the period in question, were the Chief Financial Officer, Chief Executive Officer and Director & Joint Managing Director, being employees of the company could not be held liable for a penalty to be imposed under the provisions of Section 122(1A).
Download File
show more Judgements  

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Tax Vista

Your Weekly Tax Recap

By Kasi Viswanathan V

Weekly Summary

VIL Video

Analysis of Union Budget 2026-27:
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?