GST penalty limit under Section 125 cannot be doubled under CGST and SGST; time-bar dismissal also falls with invalid penalty order.

Section 125 of the GST Act permits a maximum penalty of Rs. 25,000, so separate penalties of Rs. 25,000 under CGST and Rs. 25,000 under SGST exceeded the statutory limit and could not be sustained. Because the original penalty order was contrary to the statute, the appellate order dismissing the challenge as time-barred could not stand independently and was also set aside. The matter was remanded to the authority for a fresh order in accordance with law.

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Issues: Whether penalty under Section 125 of the GST Act could be imposed separately under CGST and SGST so as to total Rs. 50,000, and whether the consequential appellate order dismissing the appeal as time-barred could stand after the penalty order was found unsustainable.

Analysis: Section 125 contemplates a maximum penalty of Rs. 25,000. The imposition of Rs. 25,000 under CGST and a further Rs. 25,000 under SGST was therefore inconsistent with the statutory limit. Once the original penalty order was found to be contrary to the statutory mandate, the appellate order dismissing the appeal as beyond limitation could not survive independently and was liable to be set aside as a consequence.

Conclusion: The penalty order was set aside, the appellate order was also set aside, and the matter was remanded to the authority to pass a fresh order in accordance with law.

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