TaxTMI 
TaxTMI 
TaxTMI 
Penalty for same offence on two deemed taxable persons
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....enalty for same offence on two deemed taxable persons<br> Query (Issue) Started By: - SUSHIL BANSAL Dated:- 8-1-2026 Last Reply Date:- 8-1-2026 Goods and Services Tax - GST<br>Got 1 Reply<br>GST<br>Dear experts, One taxable person (say X) opened a GST firm. During DGGI search, x said the firm was opened by Y with his documents, all return filing, banking operations, invoice issuance were do....
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....ne by Y & also admitted that no real transactions done except billing & also admitted that he received certain commission from Y. and during search his business place also not found. Y in his statements did not agree to the statements of X. Now in OIO the GST department treated both X & Y as deemed taxable person & also said that the firm was opened, operated and controlled by Y. Imposed....
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.... penalty u/s 122(1(vii) and 122(1) (ii) for the same amount on both these persons thereby duplicating the amount. Plz guide whether the action of the GST dept is as per law. My client is X, whether the facts & statements given by X in search & after that in OIO, the confirmation of the dept also that the firm was opened, operated, controlled by Y will help in getting relief from the penalty to X....
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.... Reply By Sadanand Bulbule: The Reply: Having conclusively recorded a categorical finding that the GST registration was opened, operated and entirely controlled by Y-who managed all banking operations, return filing, issuance of invoices and execution of the alleged fictitious transactions-the department has acted wholly without jurisdiction and contrary to the scheme of the CGST Act in simultan....
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....eously treating X as a 'deemed taxable person' for the very same alleged contraventions. Once the principal role, mens rea and operational control stand judicially fixed on Y, X stands divested of the character of a principal offender and cannot be fastened with penalty under Section 122(1) on an equal footing. The imposition of identical penalties on both X and Y for the same set of invoices and....
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.... the same quantum of tax is legally impermissible, results in artificial duplication of penalty, violates the settled principle that a fiscal offence can attract penalty only once against the actual perpetrator, and renders the impugned order arbitrary, excessive and unsustainable in law.<br> Discussion Forum - Knowledge Sharing ....