Penalty imposed for wrongly availing Input Tax Credit but not utilized is unsustainable. Unjustified penalty waived, token penalty of Rs. 10,000 imposed.

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....The High Court examined the legality of penalty imposition u/s 74(1) and 74(5) of the CGST Act, 2017 for wrongly availed but unutilized Input Tax Credit. The petitioner reversed the amount post show cause notice issuance. Relying on a similar case, it was held that penalties u/s 73(1) and 74(1) apply only if the credit is both availed and utilized for tax payment. The court found the penalty unsustainable and suggested applying penalty u/s 122 of TNGST Act, 2017. Given the circumstances, a token penalty of Rs. 10,000 was imposed, and the petition was allowed.....