Explanation 1 to section 74

[kapil bokadia]

as per explanation 1(ii) of section 74-

where the notice under the same proceedings is issued to the main person liable to pay tax and some other persons, and such proceedings against the main person have been concluded under section 73 or section 74, the proceedings against all the persons liable to pay penalty under ¹[sections 122 and 125] are deemed to be concluded.

Is there any case law available on such issue?

AI Summary

Deemed conclusion of penalty proceedings when the principal offender's adjudication is completed, focusing on fraudulent input tax credit liability.
Explanation 1(ii) treats penalty proceedings against associated persons as deemed concluded when the principal person named in the same notice is finally adjudicated under the recovery/assessment provision. Authorities note this issue arises in fraudulent availing and passing of input tax credit; the adjudicating authority must identify the main person who commits or causes the offence and retains the primary benefit (wrongful ITC), and that person's adjudication governs the deeming effect for others.