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TMI Blog2022 (5) TMI 1073X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier orders of this court in WP.(MD)No.10355 of 2020 dated 18.12.2020 and WP.No.12657 of 2020 etc batch dated 22.02.2021, allowed the writ petition filed by the respondents herein as against the order imposing penalty for the alleged shortage of stocks amounting to Rs.7,95,770/- found in shop no.7215 at Semmanatham, Yercaud, Salem District, maintained by them. The relevant passage of the same is usefully extracted below: "4. The impugned order is thus set aside. The respondent is at liberty to initiate proceedings afresh and finalise the same after hearing the petitioner by issuing a fresh show cause notice. 5. On the question of levy of GST, learned counsel for the petitioner relies on the decision of the Madurai Bench of this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings, are against clause 5(e) of the schedule II of the Central Goods Sales Tax Act, 2017. It is also submitted that the respondents had already paid the amount of shortage as well as penalty with GST, without any protest and thereafter, filed the writ petition and asked for refund of GST, which is a clear case of estoppel. The learned counsel further submitted that the stock shortage was admitted and the shortage amount was also paid; in such an event, no domestic enquiry is necessary; and therefore, the order of the authority imposing a lenient and minor punishment of levying penalty, without affecting the service condition, is perfectly justified. However, the learned Judge erred in setting aside the same, on the ground of violation of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the penalty imposed in a disciplinary proceedings in a service matter is liable for GST, in terms of Section 7(1) (d) or 7(1-A) of the GST Act, 2017. Admittedly the said Section 7(1) (d) was not in force as on the date of passing the impugned order in the month of September 2020. The said Section was omitted with effect from 01.02.2019. The respondent, in his counter clearly stated that the notice of collection of GST was issued under Section 7(1) (d) alone. Therefore, without any provision/authority, the third respondent has issued the show cause notice to collect the GST, which is totally illegal. 33.Secondly, even assuming that Section 7(1A) of the Act r/w Rule 5(e) of the Rules will be applicable and the show cause notice was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty referred therein would only refer the penalty imposed in the course of trade or commerce. 36.As such in the present case the penalty was imposed in a disciplinary proceedings which cannot be construed that the penalty imposed in the course of trade or commerce for the imposition of GST. 37.This Court finds substance in the arguments made by Mr.R.V.Rajkumar, learned counsel appearing for the petitioners in some of the writ petitions in the batch and this Court recorded its appreciation for his assistance in the present writ petition. 38.Therefore, I am of the opinion that the GST imposed by the respondents is illegal on the face of it and the same is liable to be set aside." 7.According to the learned counsel for the appellants, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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