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TMI Blog2023 (11) TMI 1020X X X X Extracts X X X X X X X X Extracts X X X X ..... f 2023 is being taken up. 4. Present petition has been filed by the petitioner challenging the order dated 25.08.2021 whereby the order of penalty was passed imposing a penalty of Rs. 28,00,476/- towards CGST and Rs. 28,00,476/- towards SGST in purported exercise of powers under Section 122 of GST Act. The petitioner also challenges the order dated 14.09.2022 whereby the appeal preferred by the petitioner was dismissed. The said two orders are contained in Annexure - P1 & P2. 5. The facts, in brief, are that the petitioner is a private company limited and is providing manpower supply services. The petitioner was served with a show-cause notice dated 27.05.2021 contained in Annexure - P1, whereby allegations were levelled against the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellate Authority after recording the submission upheld the imposition on penalty and dismissed the appeal by placing reliance on the mandate of Section 122(1)(iii) of the Act. 7. A counter affidavit has been filed by the State justifying the orders imposing penalty again on the strength of the mandate of Section 122(1)(iii) of the Act. In the counter affidavit filed by the respondents, it has been reiterated that in terms of the GSTR - 1 filed by the petitioner, the petitioner did not pay the amount for a period of three months. It is also taken as a defense that the petitioner not only failed to deposit the GST collected by him within the time limit but also failed to provide any justification in not depositing the tax amount so col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued under sub-section (3) thereof, the proper officer may direct that such person shall be liable to pay a penalty of one hundred rupees for each day of the period during which the failure to furnish such return continues: Provided that the penalty imposed under this section shall not exceed five thousand rupees. Section 126: General disciplines related to penalty. (1) No officer under this Act shall impose any penalty for minor breaches of tax regulations or procedural requirements and in particular, any omission or mistake in documentation which is easily rectifiable and made without fraudulent intent or gross negligence. Explanation.- For the purpose of this sub-section,- (a) a breach shall be considered a 'minor breach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 73 or section 74 or section 129 or section 130, he may issue an order levying such penalty after giving a reasonable opportunity of being heard to such person. Section 128: Power to waive penalty or fee or both. The Government may, by notification, waive in part or full, any penalty referred to in section 122 or section 123 or section 125 or any late fee referred to in section 47 for such class of taxpayers and under such mitigating circumstances as may be specified therein on the recommendations of the Council. 10. He also argues that owing to Covid - 19 situation, the Ministry of Finance had issued a Notification dated 01.06.2021 whereby the amount of late fee in respect of registered persons who failed to furnish the return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nes waiving the late fee for filing the returns, this factor had to be validly considered while imposing the penalty in terms of mandate of Section 126(2) of the Act. In the facts of case, the maximum penalty imposable was Rs. 10,000/- or the tax evaded, whichever was more; there being no allegation of tax evasion, the maximum penalty that could have been imposed was Rs. 10,000/- which could even be lower than the said amount if the Taxing Authority as well as the Assessing Authority had considered the mandate of Section 126(2) of the Act read with Notification dated 01.06.2021. The said exercise clearly has not been done. 13. At this stage, learned counsel for the petitioner states that the petitioner is ready and willing to accept the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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