2025 (2) TMI 926 - HC - GST

Landmark Ruling: GST Penalties Invalidated for Exempted Services Under Pre-Existing Finance Act Provisions

Pawan Kumar Upmanyu Versus The Union of India, The Chief Commissioner Income Tax, C.G.S.T and Central Excise, Bihar, The Assistant Commissioner, C.G.S.T and Central Excise, Vaishali Division, Dak Bunglow Road, Hazipur, The State of Bihar, through the Principal Secretary, Department of Education, Govt. of Bihar, Patna, The District Program Officer (Est.), Department of Education, Sitamarhi

HC Patna allowed a writ petition challenging GST penalties, finding the imposed penalties invalid for services provided during a period when the CGST Act ... Demand for service tax penalty and imposition of various penalties under the CGST Act - penalties related to a period when the CGST Act was not in force, and services provided were exempted under the Finance Act of 1994 - HELD THAT:- Having regard to the quantum of tax involved in the present case and M/S Kanak Automobiles Private Limited are concerned, in Kanak Automobiles [2024 (4) TMI 1223 - PATNA HIGH COURT] it is Rs. 86 Lakh whereas in the present case it is Rs. 6,33,879/-, therefore, it is intended to dispose of in the light of Kanak Automobile case read with Hon’ble Supreme Court [2025 (2) TMI 847 - SC ORDER]. Petition allowed. The High Court of Patna, in a judgment delivered by Honourable Justice P. B. Bajanthri, granted relief to the petitioners in a case involving a challenge to an order passed under the GST Act. The petition sought to quash an order confirming a demand for service tax penalty and imposition of various penalties under the CGST Act. The petitioner argued that the penalties imposed were invalid as they related to a period when the CGST Act was not in force, and services provided were exempted under the Finance Act of 1994. The Court, considering the amount involved in the case and a previous decision, allowed the writ petition in favor of the petitioners.