Case Law Details
Syed Shabbir Ahmad Vs State of U.P. (Allahabad High Court)
The Allahabad High Court examined a petition challenging a penalty order dated 31.05.2024 passed under Section 125 of the GST Act, wherein ₹25,000 each was imposed under CGST and SGST, totaling ₹50,000. The petitioner’s appeal against this order had earlier been dismissed on 04.12.2024 as time-barred. The petitioner contended that Section 125 prescribes a maximum penalty of ₹25,000 and does not permit separate penalties under both CGST and SGST. Upon consideration, the Court held that imposing ₹25,000 under each head was not justified under the statutory provision. It ruled that the total penalty cannot exceed ₹25,000 as prescribed under Section 125. Consequently, the Court set aside the order to the extent it imposed separate penalties under CGST and SGST and clarified that the petitioner is liable to pay only ₹25,000 in total. The petition was disposed of accordingly.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard learned counsel for the petitioner and learned Standing Counsel for the State.
2. Present petition has been filed by the petitioner challenging the order dated 31.05.2024 passed under Section 125 of GST Act whereby penalty of Rs.25,000/- was imposed under CGST and Rs.25,000/- was imposed as SGST, total Rs.50,000/- was imposed as penalty.
The petitioner preferred an appeal against the said order which has been dismissed as being beyond limitation vide order dated 04.12.2024.
3. Contention of learned counsel for the petitioner is that imposition of Rs.25,000/- both under CGST and SGST is not prescribed under the Act. Section 125 of the Act prescribes levy of maximum penalty of Rs.25,000/-.
4. Considering the mandate of provisions of Section 125 of the Act, the imposition of penalty of Rs.25,000/- under the CGST as well as under the SGST is wholly unjustified, as such, the order dated 31.05.2024 is set aside to the extent it imposes penalty of Rs.25,000/- each under CGST as well as SGST.
5. To further clarify, the petitioner would be liable to pay the penalty of Rs.25,000/- only.
6. Present petition stands disposed off in above terms.
Author Bio
