GST Order to pay penalty without proof of wrongdoing.

Others 160 views 1 replies
User Avatar

Accountant
336 Points Joined November 2012

We have received an order from the GST department to pay a penalty under Section 122(i)(ii) for issuing an invoice without the movement of goods pertaining to year 2017-18. The penalty amount is only Rs.1100.

Accepting this penalty feels wrong as we have not engaged in the activity alleged in the order.

We are now in a dilemma:

  • On one hand, the amount is small (just Rs.1100). If we pay it to close the matter, we might be implying acceptance of an action we did not commit, which could lead to more action & penalties in the future for such acceptance.
  • On the other hand, pursuing an appeal would be costly for opposing such a small penalty.

We would appreciate your guidance on how best to proceed in this situation.

0 Reply Share Follow
On 24 February 2025 at 14:53 Report
Replies (1)
User Avatar

Master in Accounts & high court Advocate
9123 Points Joined December 2011

 Paying the penalty might imply acceptance of the alleged action, while appealing could be costly. Here's a balanced approach to consider:

 Options to Consider 1. *Check the order for errors*: Verify the order for any procedural or factual errors. If you find any, you can use this as a basis for your appeal.

2. *Gather evidence*: Collect documents and records to prove that the goods were indeed moved, or that the invoice was issued correctly. This evidence will be crucial in supporting your case.

 3. *File a reply*: Instead of paying the penalty or appealing, you can file a reply to the GST department, stating your case and providing evidence. This might help clarify the situation and potentially lead to the penalty being waived.

4. *Appeal to the Appellate Authority*: If the GST department doesn't respond favorably to your reply, you can appeal to the Appellate Authority. This will give you an opportunity to present your case and evidence.

5. *Consider a settlement*: If the appeal process seems too costly or time-consuming, you could try negotiating a settlement with the GST department. They might be willing to reduce or waive the penalty.

Factors to Weigh 1. *Cost-benefit analysis*: Weigh the cost of appealing against the penalty amount. If the cost of appealing is significantly higher than the penalty, it might not be worth pursuing.

 2. *Principle vs. practicality*: Consider the importance of standing by your principle of not accepting the penalty vs. the practicality of paying a small amount to close the matter.

3. *Future implications*: Think about the potential implications of accepting the penalty on your future business operations and relationships with the GST department.

Recommendation Based on the information provided, I recommend filing a reply to the GST department, stating your case and providing evidence.

This approach allows you to present your side of the story without incurring significant costs. If the department doesn't respond favorably, you can then consider appealing to the Appellate Authority or negotiating a settlement.

Reply
On 24 February 2025 at 16:49


CCI Pro

Leave a Reply

Post Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Recent Threads

More recent discussions | Post

Related Threads
Loading