Raviprasad Ganesh Zantye Vs Union of India and Ors. (Bombay High Court)
Penalty under Section 122(1A) stayed as provision applies only to taxable person, not director: Bombay HC
The Bombay High Court considered a writ petition challenging an order dated 17 March 2026 imposing penalty on the petitioner under Section 122(1A) of the CGST Act, 2017. The petitioner contended that Section 122(1A) does not apply to an individual, including a present or former director of a company, and relied on the decisions in Shantanu Sanjay Hundekari vs. Union of India and Amit Manilal Haria & Ors. vs. The Joint Commissioner, CGST & Central Excise & Ors. It was also submitted that the petitioner had resigned as the director of the company before the impugned order was passed. The State sought time to obtain instructions. The Court issued notice to the respondents, made it returnable on 6 August 2026, recorded waiver of service by the State, directed issuance of notice to the remaining respondents, and, having regard to the facts and the cited decisions, ordered as an ad-interim measure that the operation of the impugned order dated 17 March 2026, insofar as it concerned the writ petitioner, would remain suspended until further orders.
Argued by Adv. Bharat Raichandani a/w Adv. Mahesh Raichandani i/b UBR Legal.
Cases Discussed
- Amit Manilal Haria & Ors. vs. The Joint Commissioner, CGST & Central Excise & Ors. (Bombay High Court), 2026(2) TMI 1409
- Shantanu Sanjay Hundekari vs. Union of India (Bombay High Court), 2024(3) TMI 1277
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. The order dated 17th March, 2026, issued by the Respondent No.3, inter alia, imposing penalty upon the Petitioner under the provisions Section 122 (1A) of the CGST Act, 2017 ( for short “ the Act of 2017’) has been assailed in this Writ Petition, inter alia, contending that Section 122 (1A) of the Act of 2017 cannot have any application on any individual person including the present or former Director of the Company.
2. By referring the decisions of this Court in the cases of Shantanu Sanjay Hundekari vs. Union of India 1 and Amit Manilal Haria & Ors. vs. The Joint Commissioner, CGST & Central Excise & Ors.2 , Mr. Raichandani, learned Counsel for the Petitioner submitsthat the said position of law is now well settled. Notwithstanding the same and despite the fact that the Petitioner has resigned as the Director of the Company, the impugned order has been passed against him, which is unsustainable in the eyes of law. Hence, the directions against the Petitioner be stayed.
3. Ms. Jyoti Chavan, learned Addl. G.P. appearing for the Respondent No.2-State, seeks some time to obtain instruction.
4. Issue notice to the Respondents, returnable on 6th August, 2026.
5. Ms. Jyoti Chavan, waives service of notice on the Respondent No.2.
6. Court’s notice be issued to the remaining Respondents. Petitioner to furnish copies in the Registry for issuance of notice.
7. Heard on the prayer of the interim relief.
8. Having regard to the facts and circumstances of the case as well as decisions in the cases of Shantanu Sanjay Hundekari (supra) and Amit Manilal Haria (supra), as an ad-interim measure, it is provided that the operation of the impugned order dated 17th March, 2026 qua the Writ Petitioner, shall remain suspended until further order.
Notes:
1 2024(3) TMI 1277
2 2026(2) TMI 1409
