Supreme Court increases penalty on GST officer for falsely penalising company

The Supreme Court recently imposed fine on a GST officer from Telangana for falsely imposing penalty of Rs 69,000 M/s Satyam Shivam Papers Pvt. Ltd. as the e-way bill had expired a day earlier.

A division bench of justices Dinesh Maheshwari and Hrishekesh Roy not only set aside the penalty levied by the GST officer, but also increased the fine imposed on him, by the High Court for the State of Telangana at Hyderabad from Rs 10,000 to Rs 69,000.

The SC was hearing an appeal filed by the Assistant Commissioner challenging the June 2, 2021, order of the HC.

GST officer had imposed penalty of Rs 69,000 on the company for a day’s delay in delivering the goods. However, the GST officer had admitted that there was traffic blockage on its route due to the anti CAA and NRC agitation on January 4, 2020.

The HC had set aside the levy of tax and penalty of Rs 69,000 while imposing costs of Rs 10,000on the GST officer.

Concurring with the HC judgment, SC said that there was nothing on record to show that the company was evading tax because the e-way bill had expired a day earlier.

The SC has also taken a stern view saying that the officer’s intention was “questionable, particularly when it was found that the goods in question, after being detained were, strangely, kept in the house of a relative of the officer for 16 days and not at any other designated place for their safe custody”.

“Considering the overall conduct of the GST officer and the corresponding harassment faced by the company. we find it rather necessary to enhance the amount of costs,” said SC while enhancing the penalty amount on the GST officer to Rs 69,000.

The apex court has clarified that State government would be entitled to recover the amount of costs, after making payment to the company, directly from the concerned officer responsible for this entirely unnecessary litigation.