Can Appeal order rectification apply for Penalty Under section 125

[SHARAD ANADA]

The Mobile squad officer has issued demand order u/s. 129 of CGST Act, 2017. Aggrieved by the order the RTP has filed an Appeal before First Appellate Authority(FAA). The FAA has allowed the Appeal but he imposed CGST penalty of Rs. 25000/- and SGST Penalty of Rs. 25000/- under Section 125.

Can FAA imposed penalty under section 125 which was never demanded in original order and secondly general penalty under section 125 can be imposed only where no separate penalty is provided. However specific penalty of 200% of tax amount has been provided under section 129.

Can RTP file Appeal order rectification Application under section 161 for drop of penalty under section 125

AI Summary

Section 125 penalty in goods-in-transit disputes raises questions on appellate enhancement and rectification under GST law.
Penalty under Section 125 in a Section 129 goods-in-transit dispute raises questions on appellate enhancement, the coexistence of general and specific penalty provisions, and rectification. The commentary notes that Section 129 contains a specific penalty mechanism, while Section 125 is described as residuary and ordinarily applicable only where no separate penalty is provided. It also discusses whether the First Appellate Authority may add a new penalty in appeal, whether notice and hearing are required, and whether Section 161 rectification can be used where the penalty is said to be an error apparent on the record.