Penalty reduced from Rs. 56 lakh to Rs. 10 thousand in case of delay in payment of tax collected by the Supplier

Last updated: 04 December 2023

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The Allahabad High Court has significantly reduced a penalty imposed on Clear Secured Services Private Limited from over Rs 56 lakh to just Rs 10,000. The original penalty was levied due to a delay in depositing collected GST. The court found that since no tax was evaded, the maximum penalty should be Rs 10,000 as per Section 122(1)(iii) of the CGST Act. The court also noted that the Revenue Department failed to consider relevant government notifications and Section 126(2) of the CGST Act when imposing the higher penalty.

Court :
Allahabad High Court

Brief :
The Hon'ble Allahabad High Court in the case of Clear Secured Services Private Limited v. Commissioner, State Tax GST UP, [Writ Tax No. 5 of 2023 dated November 23, 2023] allowed the writ petition and reduced the amount of penalty from Rs.56,00,952.72/- to Rs.10,000/-, thereby holding that, the maximum penalty of Rs.10,000/- could be imposed by the Revenue Department, when no amount of tax has been evaded by the Assessee and there is only delay in depositing the amount of tax collected by the Supplier.

Citation :
Writ Tax No. 5 of 2023 dated November 23, 2023

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1 Year PLAN

1999

(Excl. of GST ₹359)

2 Years PLAN

3499

(Excl. of GST ₹629)

BEST VALUE

3 Years PLAN

4999

(Excl. of GST ₹899)

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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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