Penalty proportionality: impose penalties commensurate with breach severity while allowing opportunity to be heard.

Penalties under the Jammu and Kashmir GST regime should not be imposed for minor breaches or easily rectifiable documentation errors made without fraud or gross negligence; assessment must be commensurate with severity. No penalty may be imposed without an opportunity to be heard, and orders must state the breach and legal basis. Voluntary pre-discovery disclosure is a mitigating factor, whereas penalties fixed by statute as sums or percentages are excluded from these discretionary rules.

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