Penalty under Section 122(1A) CGST Act not applicable for transactions before January 1, 2021

The HC held that penalty under section 122(1A) of the CGST Act could not be levied for transactions prior to its effective date of 1 January 2021. The court directed issuance of notice, which was accepted by the respondents' representative. The respondents were ordered to file a counter affidavit by 15 July 2025, with the matter listed for further hearing on 18 July 2025 along with connected cases.

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The Delhi High Court, in a hybrid hearing, addressed the petitioner's contention that Section 122(1A) of the CGST Act, effective from 1st January 2021, cannot impose penalties for transactions predating this provision. The petitioner relied on the Bombay High Court's decision in Amit Manilal Haria v. The Joint Commissioner of CGST & CE & Ors. The Court noted that the taxable person, M/s. Sanskriti EXIM Private Limited, had challenged the show cause notice via W.P.(C) 929/2025 and sought to include the impugned order therein. The Court ordered tagging the writ petition with the present case and listed the matter for further hearing alongside similar petitions concerning the "question of taxable person." The Court issued notice to respondents, directed filing of counter affidavits by 15th July 2025, and restrained any coercive action against the petitioner pending further orders.

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