Tax Penalty of ₹ 56,00,952/- reduced to ₹ 20,000/- To understand why and how

Penalty of ₹. 56,00,952/- reduced to ₹. 20,000/-.

To understand why and how, refer the below judgment.

CASE NAME: CLEAR SECURED SERVICES PRIVATE

LIMITED VERSUS COMMISSIONER, STATE TAX GST

COURT: ALLAHABAD HIGH COURTWrit Tax No. – 5 of 2023 and 1 of 2023

There is no material.record or even an allegation against the petitioner that the amountwas collected but not paid or evaded, but only allegation is that the amount was not padwithin the time prescribed and was paid after a delay. Even if the said allegation for thesake of argument is treated to be correct, the only penalty imposable against the petitionerwould be Rs. 10,ooo/- as no amount of tax has admittedly been evaded by the petitioner.Even otherwise, the Appellate Authority or even the Assessing Authority has failed infollowing the general disciplines relating to penalty, specifically the mandate of Section126(2) of the Act.

In the present case, in terms of the Notification dated 01.06.2021, the Government inexercise of its powers under Section 128 of the Act had issued guidelines waiving the latefee for filing the returns, this factor had to be validly considered while imposing thepenalty in terms of mandate of Section 126(2) of the Act. In the facts of case, the maximumpenalty imposable was Rs. 10,ooo/- or the tax evaded, whichever was more; there being noallegation of tax evasion, the maximum penalty that could have been imposed was Rs.10,ooo/- which could even be lower than the said amount if the Taxing Authority as well asthe Assessing Authority had considered the mandate of Section 126(2) of the Act read withNotification dated 01.06.2021. The said exercise clearly has not been done.

The petitioner states that the petitioner is ready and willing to accept the penalty of Rs.10,ooo/- to give quietus to the litigation – Considering the scope of the provisions asdiscussed herein above as well as the offer made by the petitioner, the orders impugnedare set aside.

The petitioner shall pay a penalty of Rs. 10,ooo/- in both the cases within a period of twoweeks from today by depositing the same with the department – Petition disposed off.