penalty u/s 122(1) (ii) covered under 74(8)-?

[SUSHIL BANSAL]

Show cause notice for Fy 18-19 issued for supplying goods without eway bill proposing penalty u/s 122(1) (ii).

1. penalty as proposed u/s 122(1) (ii) can be covered under 74(8) ?.In my opinion it should not be.if under impression of 74(8) we deposited penalty@25% within 30 days of SCN (DRC-03 with the SCN No & 74(8) filed), whether we can claim refund & the proceedure thereof Further if department accepts our DRC then what?

2. in this client issued part-A but failed to issue part B, & the sales was local sales in motarised vehicles.If we submit all evidences ,account confirmation from the recepient also, then whether our case is out of 122(1) (ii) & in such a situation whether it will fall under general penalty u/s 125 & whether general penalty can be imposed as the SCN has no reference of Section 125.

3. In this case client did not issue eway bill of 6 invoices, whether the general penalty u/s 125 is per default or it will be single penalty of all such 6 defaults

 

[KASTURI SETHI]

Dear querist,

Query wise reply is as under :-

(i) Section 74 (8) is not applicable to Section 122(1)(ii) of CGST Act as Section 74 (8) talks of sub-section 1 of Section 74 where fraudulently tax has been evaded or ITC availed. In this case, goods were supplied without e-way bill. It appears to be a procedural lapse.

(ii) If the tax payer can prove with ALL documentary evidences to the effect that they have not evaded tax, refund of penalty can be claimed. subject to clean chit in the case booked. Refund can be claimed even if DRC-03 is accepted. It is well settled law that the Adjudicating Authority cannot go beyond the gamut of SCN. In case Section 125 has not been invoked in the SCN, general penalty cannot be imposed upon the noticee under Section 125. Pl. note that the department can issue corrigendum prior to the adjudication of the SCN as per Adjudicational Manual.

(iii) Offence-wise penalty can be imposed upon.

Other information

(i) If there is no revenue loss to the Govt. the department may take lenient and impose minimum penalty.

(ii) Any mistake/lapse which does not cause revenue loss to the Govt., that is a procedural lapse. There is provision for imposition of penalty for procedural lapse.

(iii) Refund claim will be co-related with offence committed. Clean chit is an absolutely must in the case mentioned above.

[SUSHIL BANSAL]

Sir,

I think client should get benefit of penalty concessions u/s 74(8) if the show cause notice has been issued by invoking provisions of section 74

[KASTURI SETHI]

Your thinking is correct in the situation detailed in the query.

AI Summary

Clarification Sought on GST Penalty Under Section 122(1)(ii) and Refund Eligibility; Section 74(8) Not Applicable A discussion on a GST-related issue involves a show cause notice for supplying goods without an e-way bill, proposing a penalty under Section 122(1)(ii). The query seeks clarity on whether this penalty can be covered under Section 74(8) and if a refund is possible if the penalty was paid under that impression. The discussion highlights that Section 74(8) is not applicable as it pertains to tax evasion or fraudulent ITC claims, and suggests that if evidence proves no tax evasion, a refund can be claimed. It also addresses whether general penalties under Section 125 can be imposed without specific reference in the notice.