TMI Blog2020 (8) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... Act and the Rules framed under it that no penalty had been prescribed for violation of the provisions of Section 171 (1) of the Act, therefore, the Respondent was issued show cause notice to state why penalty should not be imposed on him for violation of the above provisions as per Section 122 (1) (i) of the above Act as he had apparently issued incorrect or false invoice while charging excess consideration and GST from the buyers - It is apparent from the perusal of Section 122 (1) (i) that the violation of the provisions of Section 171 (1) is not covered under it as it does not provide penalty for not passing on the benefits of tax reduction and ITC. It only provides for imposition of penalty for not issuing an invoice or for issuing an incorrect or false invoice in respect of any supply of goods or services or both Since, the profiteered amount is not a tax imposed under the CGST Act, 2017, the above penalty cannot be imposed for violation of the anti-profiteering provisions made under Section 171 of the above Act. Since, no penalty provisions were in existence between the period w.e.f. 01.07.2017 to 31.08.2018 when the Respondent had violated the provisions of Section 17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 11.02.2019 supplied details of the ITC benefit passed on to the 125 buyers including the Applicant No. 1 till 31.01.2019 including 18% interest amounting to ₹ 59,57,306/-. The Respondent had given details of cheque numbers and the dates on which the ITC benefit was passed on to the buyers by him. The Applicant No. 1 as per the submissions of the Respondent had received benefit of ₹ 3,44,455/- vide Cheque No. 004549 dated 05.02.2019. 4. This Authority in its above Order had also observed that the Respondent had not denied that the benefit of ITC had accrued to him which he was required to pass on to his buyers but it was passed on by him only in the month of February 2019 after the initiation of the proceedings against him and therefore, it was held that the Respondent had not only collected extra amount on account of price of the flat/plot from the buyers but he had also compelled them to pay more GST on the additional amount realised from them between the period from 01.07.2017 to 31.08.2018 which appeared to be deliberate and conscious violation of the provisions of Section 171 of the CGST Act, 2017 and therefore, he had apparently committed an offence under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no penalty was imposable on him. In support of his above argument the Respondent has placed reliance on the decision of the Hon ble Supreme Court given in the case of Hindustan Steel Ltd. v. State of Orissa AIR 1970 (SC) 253 = 1969 (8) TMI 31 - SUPREME COURT in which it was held as under:- But the liability to pay penalty does not arise merely upon proof of default in registering as a dealer. An Order imposing penalty for failure to carry out a statutory obligation is the result of quasi criminal proceedings, and the penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Where penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Association, 18 U. C. C. P. 19; Batterman v. Ingalls, 48 Ohio St. 408. 28 N. 10. 108. The Malor Law Lexicon by P. Ramanatha Aiyar 4 th Edition 2010: False - Erroneous, untrue; the opposite of correct, or true. The term does not necessarily involve turpitude of mind. In the more important uses in jurisprudence the word implies something more than a mere untruth, it is an untruth coupled with a lying intent. (Wood v. State, 15 Am Rep 664), or an intent to deceive or to perpetrate some treachery or fraud. The Chambers Dictionary: False -wrong; erroneous deceptive or deceiving; Incorrect - containing faults: not accurate: not correct in manner or character; improper, not regulated or corrected. 11. From the above dictionary meanings, the Respondent has contended that the term incorrect or false in itself contained an element of deceit or intent to lie i.e. mens rea , however, In the instant matter, he was under a bona fide belief that all the particulars mentioned in the invoices issued by him were correct. Thus, there was no violation of clause (i) of Section 122 (1). 12. We have carefully considered the submissions of the Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provides for imposition of penalty of ten thousand rupees or equal to the tax evaded or the tax not deducted under section 51 or short deducted or deducted but not paid to the Government or tax not collected under section 52 or short collected or collected but not paid to the Government or input tax availed or passed on or distributed irregularly, or the refund claimed fraudulently, whichever is higher. Since, the profiteered amount is not a tax imposed under the CGST Act, 2017, the above penalty cannot be imposed for violation of the anti-profiteering provisions made under Section 171 of the above Act. 15. It is further revealed that vide Section 112 of the Finance Act, 2019 specific penalty provisions have been added for violation of the provisions of Section 171 (1) which have come in to force w.e.f. 01.01.2020, by inserting Section 171 (3A) which provides as under:- (3A) Where the Authority referred to in sub-section (2) after holding examination as required under the said sub-section comes to the conclusion that any registered person has profiteered under sub-section (1), such person shall be liable to pay penalty equivalent to ten per cent. of the amount so profiteere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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