2025 (2) TMI 926 - HC - GST

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 ... 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.