Retrospective Penalty u/s 122(1A) CGST Barred | HC

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  • Last Updated on 11 March, 2026

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CGST retrospective penalty

Case Details: Amit Manilal Haria vs. Joint Commissioner, CGST & Central Excise - [2026] 184 taxmann.com 119 (Bombay)

Judiciary and Counsel Details

  • G. S. Kulkarni & Aarti Sathe, JJ.
  • Abhishek A. Rastogi, Pooja M. Rastogi, Meenal Songire & Aarya More for the Petitioner.
  • Ram Ochani & Sangeeta Yadav for the Respondent.

Facts of the Case

The petitioners filed a writ challenging penalties proposed and imposed under Section 122(1A) of the CGST Act. A search was conducted on the assessee and related firms, summons were issued, and statements were recorded and retracted. The show cause notice (SCN) alleged wrongful availment and transmission of ineligible ITC. The adjudicating authority imposed penalties on each petitioner and issued DRC-07. The petitioners contended that they were not taxable persons and had neither retained any benefit from the transactions nor caused them. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that Section 122(1) applied only to taxable persons and mandated dual conditions, namely that a person must have retained the benefit of transactions under clauses (i), (ii), (vii), or (ix) and that such transactions were conducted at their instance. Clauses (i), (ii), (vii), and (ix) targeted violations by taxable persons. No material or finding indicated that the petitioners were taxable persons or had retained benefits or caused the transactions. Furthermore, Section 122(1A) was inserted with effect from 01-01-2021, and penalties could not be retrospectively applied to acts committed before that date, as Article 20(1) of the Constitution of India barred ex post facto penal liability. Consequently, the SCNs and orders imposing penalties on the petitioners were held unsustainable.

List of Cases Reviewed

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied