Union of India & Ors. Vs Shantanu Sanjay Hundekari & Anr. Etc. (Supreme Court of India)
The Supreme Court of India upheld a High Court ruling that employees and authorized signatories of a company cannot be held personally liable for penalties under Sections 122(1-A) and 137 of the Central Goods and Services Tax (CGST) Act. The case arose when the Revenue issued a show cause notice to an employee of Maersk, seeking recovery of ₹3,731 crores. The High Court quashed the notice, stating that the GST provisions do not impose vicarious liability on employees for a company’s tax liabilities. It held that the Revenue lacked jurisdiction to adjudicate the notice and deemed the demand against the employee as excessive and unjustified.
The Supreme Court, while dismissing the Revenue’s appeal, found no reason to interfere with the High Court’s judgment. However, it left open the broader legal question regarding the interpretation of Sections 122(1-A) and 137. This decision reaffirms that tax liabilities should be imposed on the company itself rather than its employees, unless explicitly provided by law. The ruling provides clarity on the extent of liability under GST laws and ensures that employees are not unduly pressured in corporate tax disputes. The Special Leave Petitions were dismissed, and all pending applications were disposed of. Also Read: Bombay HC Dismisses Rs. 3731 Crore CGST Act Penalty Notice issued to Salaried Employee
