Section 122 of CGST Act: Misuse by Authorities and Judicial Relief for Assessees

Abhishek Raja | Last updated: 21 August 2024

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Section 122 of the CGST Act outlines penalties for numerous tax-related offences, ranging from issuing incorrect invoices to wrongfully availing input tax credit. Penalties typically involve a sum of Rs 10,000 or the amount of tax evaded, whichever is higher, with variations for non-fraudulent errors and aiding offences. However, recent High Court rulings suggest that authorities sometimes misuse this section, imposing penalties without sufficient grounds like fraud or wilful misstatement. These judgments often favour assessees, directing that penalties should be proportionate and applied judiciously, with some cases leading to reduced penalties or quashing of orders.

This section is used, or I must say misused, in most of the Notices! The department is trying to levy a penalty under this section in most cases, but the High Court's views are in favour of the Assessee. Section 122 of the CGST Act Penalty for Certain Offences 1. General Offenses (Subsection 1) This subsection lists 21 offences, such as supplying goods or services without issuing an invoice, issuing incorrect invoices, failing to pay collected taxes to the government, wrongfully availing

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About the Author

Abhishek Raja

Practising CA

Blogger at GSTPanacea.com Fellow Member of ICAI M.Com, DISA(ICAI), Certified Indirect Taxes (ICAI)-Experience in the field of Indirect Taxation for 15 years Certified Valuer (ICAI) Member Sales Tax Bar Association (Delhi) Member Taxation Bar Association (Ghaziabad) Ex-Member NIRC Company Law Research Group-2014- ... Read more

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