Partners Personally Liable to Penalty u/s 122(1A) of the CGST Act Even for Pre-2021 Transactions

Last updated: 22 June 2026

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The Gauhati High Court has ruled that partners of a firm can be held personally liable for penalties under Section 122(1A) of the CGST Act, even if the transactions occurred before this section was introduced in 2021. The court clarified that 'any person' in this section includes individuals who benefited from or instigated fraudulent transactions, not just the 'taxable person' (the firm). This decision contrasts with some previous rulings and aims to hold individuals accountable for tax evasion.

Court :
Gauhati High Court

Brief :
The Hon'ble Gauhati High Court in Mayank Bansal v. Union of India & Ors. [WP(C) No. 24 of 2026 dated June 08, 2026] upheld the imposition of personal penalty on partners of a partnership firm under Section 122(1A) of the Central Goods and Services Tax Act, 2017 ( "the CGST Act" ) for the tax evaded by the firm and held that the term "any person" in Section 122(1A) is not confined to a "taxable person" as defined under Section 2(107) and would cover partners/officers who retain the benefit of the fraudulent transactions and at whose instance such transactions are conducted. The Court further held that Section 122(1A), although inserted with effect from January 01, 2021, can be invoked for transactions pertaining to the period prior to its insertion, since the said sub-section does not create any new offence but only identifies the natural person liable for the underlying violations enumerated in clauses (i), (ii), (vii) and (ix) of Section 122(1) of the CGST Act, which already existed since the inception of the CGST Act.

Citation :
WP(C) No. 24 of 2026 dated June 08, 2026

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Attached File : 671907_6016_mayank_bansal.pdf

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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