Maximum Penalty of Rs. 10,000 Shall be Levied for Delay in Payment of Tax Amount; Penalty u/s 122 to be Set Aside | HC

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penalty u/s 122

Case Details: Clear Secured Services (P.) Ltd. v. Commissioner, State Tax GST - [2023] 156 taxmann.com 645 (Allahabad)

Judiciary and Counsel Details

    • Pankaj Bhatia, J.
    • Jameel Ahmad for the Petitioner.

Facts of the Case

In the present case, the petitioner received a notice alleging that it had not paid GST within prescribed time and was liable for payment of penalty of approx. Rs. 28 lacs each in CGST and SGST in terms of Section 122(1)(iii). The petitioner was not able to reply on account of COVID-19 and consequently, ex-parte order was passed against petitioner imposing penalty indicated in show-cause-notice. It filed appeal but the same was dismissed and thus, it filed writ petition against the demand.

High Court Held

The Honorable High Court noted that there was no material on record or even an allegation against the petitioner that amount was collected but not paid or evaded, but only allegation was that amount was not paid within time prescribed and was paid after a delay.

In such case, the maximum punishment would be Rs 10,000 but the Appellate Authority had failed in following general disciplines relating to penalty, specifically provided under Section 126(2). Therefore, the Court held that the said order imposing penalty was to be set aside and the petitioner was directed to pay Rs. 10,000 as penalty.

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