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2022 (5) TMI 1074 - HC - GSTLevy of penalty - rectification of mistake - input tax has been wrongly availed or utilized - Section 161 of the CGST Act - HELD THAT:- Section 127 of the Act which has some importance deals with power to impose penalty in certain cases. It states that where the proper officer is of the view that a person is liable to a penalty and the same is not covered under any proceedings under Section 62 or Section 63 or Section 64 or Section 73 or Section 74 or Section 129 or Section 130, he may issue an order levying such penalty after giving reasonable opportunity of hearing such person. In the instant case, Form GSTR-3A was issued on 21.07.2020 for not filing the returns within the time prescribed. On 13.08.2020, a notice came to be issued under Rule 100(1) of CGST and SGST Rules, 2017/APGST Rules, 2017 read with Section 62(1) of the GGST Act, 2017/APGST Act, 2017 - the penalties have been imposed creating additional liability on the petitioner, which was not reflected in the earlier notice dated 13.08.2020. No opportunity of hearing was given to the petitioner while imposing the said penalty. Section 62 of the Act does not anywhere speaks about imposing penalty. It only speaks about liability for payment of interest subsection (1) of Section 50 or for payment of late fee under Section 47 of the Act. Further, if the penalty is to be imposed in cases, which are not covered under Section 62 or Section 63 or Section 64 or Section 73 or Section 74 or Section 129 or Section 130, the authority can impose penalty after giving reasonable opportunity of hearing such person - under Section 161 of the Act any rectification, which adversely affects any person is possible only after following the principles of natural justice. Since the order impugned substantially affects the assessee as penalty is sought to be imposed, which demand did not form part of notice dated 13.08.2020, without giving an opportunity of hearing, the orders under challenge are set aside. However, the respondents are permitted to proceed further by issuing a fresh notice and pass orders in accordance with law. Petition allowed.
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