Topic
Directors of a Delhi-based electronics trading firm cannot bypass the CGST appellate remedy by alleging defective notice service and denial of personal hearing; the Delhi HC held such factual disputes fall outside Article 226 jurisdiction, dismissing challenges to a Rs. 27.11 crore penalty under Section 122(1A) CGST Act.
Delhi HC ruled that a CGST penalty must be contested through a Section 107 appeal and that the pre-deposit requirement is governed by the original provision, staying recovery until the taxpayer deposits 25 % of the penalty. The order clarifies the procedural path for taxpayers while the scope of Section 122(1) remains pending before the Supreme Court.
The Gauhati High Court has ruled that partners of a firm can be penalized under Section 122(1A) of the CGST Act for retaining benefits from fraudulent transactions, even if they are not registered taxable persons. This extends liability beyond the entity to individuals who profit from tax evasion, and applies retroactively to pre-2021 transactions if notice was issued after the provision came into force, significantly broadening enforcement scope for GST fraud cases.