2025 (1) TMI 1249 - SCH - GST

Employee not personally liable for Rs 3,731 crore recovery under Sections 122(1-A) and 137 GST

The SC dismissed the SLP, upholding the HC's conclusion that the respondent, being merely an employee of the company, could not be held liable for ... Recovery of dues - Interpretation of Statute - Section 122(1-A) and Section 137 of the GST Act - HELD THAT:- The High Court after assigning cogent reasons took the view that the respondent – herein was merely an employee of the Company and he could not have been fastened with the liability of Rs. 3731 Crore. There are no good reason to interfere with the common impugned Orders passed by the High Court - SLP dismissed. Delay condoned. The High Court quashed show cause notices issued under Section 74 of the CGST Act seeking recovery of Rs. 3,731 crore, holding that 'the basic jurisdictional requirements/ingredients, are not attracted for issuance of the show cause notice under Section 74 of the COST Act so as to inter alia invoke Section 122(1-A) and Section 137 against the petitioner.' The High Court further held that 'it is ill-conceivable to read and recognize into the provisions of Section 122 and Section 137, of the CGST Act any principle of vicarious liability being attracted,' and concluded that the notice was bad as the respondent was 'merely an employee' who could not be fastened with the alleged liability, which appeared to be that of Maersk. Supreme Court declined to interfere with the impugned High Court orders, dismissed the Special Leave Petitions, and expressly kept open the question of law regarding the interpretation of Sections 122(1-A) and 137 of the GST Act. Pending applications disposed of.