Employees Cannot Be Penalised under Section 122(1A) of the CGST Act, Without Being 'Taxable Persons' and Retaining Transactional Benefit

Last updated: 30 April 2026

Quick Summary

The Bombay High Court has ruled that company employees cannot be penalised under Section 122(1A) of the CGST Act unless they are 'taxable persons' who personally benefited from the transaction and were responsible for it. Furthermore, the court stated that this provision cannot be applied retrospectively to periods before January 1, 2021. This decision clarifies that employees acting in their official capacity, without personal gain or direct instigation of the transaction, are not subject to such penalties.

Court :
Bombay High Court

Brief :
The Hon'ble Bombay High Court in the case of Amit Manilal Haria & Ors. v. Joint Commissioner of CGST& Central Excise & Ors. [Writ Petition No. 5001 of 2025, order dated February 25, 2026] held that penalty under Section 122(1A) of the CGST Act cannot be imposed on company employees unless they are 'taxable persons' who retained the benefit of the impugned transaction and at whose instance such transaction was conducted; further, the provision cannot be applied retrospectively for the period prior to January 1, 2021.

Citation :
Writ Petition No. 5001 of 2025, order dated February 25, 2026

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