HC Grants Interim Relief on Pre‑2021 GST Penalty u/s 122(1A)

Centax Editorial Board

May 14, 2025

• 2 min. read

Case Details: Amit Manilal Haria Versus Joint Commissioner of CGST & CE (2025) 30 Centax 82 (Bom.)

Judiciary and Counsel Details

Firdosh P. Pooniwalla & B.P. Colabawalla, JJ.
S/Shri Abhishek Rastogi, Manish Rastogi, Ms Pooja Rastogi, Ms Meenal Songire & Ms Aarya More, Advs. for the Petitioner.
S/Shri Ram Ochani, Umesh Gupta & Ms Sangeeta Yadav, Advs. for the Respondent.

Facts of the Case

The petitioners in this case were the CFO, CEO, and a director of the company ’Shemaro’. A penalty under section 122(1A) of the CGST Act was imposed on them for tax evasion, which covered the period from July 2017 to March 2022. The respondents, in the course of an investigation, held the petitioners responsible for the GST evasion committed by the company. The petitioners challenged the imposition of the penalty, contending that section 122(1A), which provides for such penalties, came into force only on 01-01-2021, and therefore, any penalty for the period prior to this date could not have been levied. They argued that the show cause notice proposed penalty for a period extending back to July 2017, which they claimed was legally untenable as the provision had only prospective applicability. The petitioners sought the intervention of the High Court to set aside the penalty order for the period before 01-01-2021 and to grant interim relief.

High Court Held

The Hon’ble High Court held that the authorities were to file a reply in response to the petitioners’ challenge. The Court further directed that an ad interim relief be granted to the petitioners, which would provide temporary relief from the penalty enforcement. The Court’s ruling acknowledged the petitioners’ argument regarding the retrospective application of section 122(1A) and observed that since the provision had come into force only on 01-01-2021, no penalty could be demanded for the period prior to this date. Consequently, the matter was scheduled for further hearing, with the respondent authorities required to file their response. The Court’s interim order effectively protected the petitioners from immediate penal action during the pendency of the proceedings.