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

HC Patna allowed a writ petition challenging GST penalties, finding the imposed penalties invalid for services provided during a period when the CGST Act was not in force and the services were exempted under the Finance Act of 1994. The court's ruling provided relief to the petitioners by quashing the tax demand order.

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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.

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