CHAPTER XIX
OFFENCES AND PENALTIES
122. Penalty for certain offences -
(1) Where a taxable person who––
(i) supplies any goods or services or both without issue of any invoice
or issues an incorrect or false invoice with regard to any such supply ;
(ii) issues any invoice or bill without supply of goods or services or
both in violation of the provisions of this Act or the rules made
thereunder ;
(iii) collects any amount as tax but fails to pay the same to the
Government beyond a period of three months from the date on which
such payment becomes due ;
(iv) collects any tax in contravention of the provisions of this Act
but fails to pay the same to the Government beyond a period of three
months from the date on which such payment becomes due ;
(v) fails to deduct the tax in accordance with the provisions of subsection
(1) of section 51, or deducts an amount which is less than the
amount required to be deducted under the said sub-section, or where he
fails to pay to the Government under sub-section (2) thereof, the amount
deducted as tax ;
(vi) fails to collect tax in accordance with the provisions of subsection
(1) of section 52, or collects an amount which is less than the
amount required to be collected under the said sub-section or where he
fails to pay to the Government the amount collected as tax under subsection
(3) of section 52 ;
(vii) takes or utilizes input tax credit without actual receipt of goods
or services or both either fully or partially, in contravention of the
provisions of this Act or the rules made thereunder ;
(viii) fraudulently obtains refund of tax under this Act ;
(ix) takes or distributes input tax credit in contravention of section
20, or the rules made thereunder ;
(x) falsifies or substitutes financial records or produces fake accounts
or documents or furnishes any false information or return with an
intention to evade payment of tax due under this Act ;
(xi) is liable to be registered under this Act but fails to obtain
registration ;
(xii) furnishes any false information with regard to registration
particulars, either at the time of applying for registration, or
subsequently ;
(xiii) obstructs or prevents any officer in discharge of his duties
under this Act ;
(xiv) transports any taxable goods without the cover of documents
as may be specified in this behalf ;
(xv) suppresses his turnover leading to evasion of tax under this
Act ;
(xvi) fails to keep, maintain or retain books of account and other
documents in accordance with the provisions of this Act or the rules
made thereunder ;
(xvii) fails to furnish information or documents called for by an officer
in accordance with the provisions of this Act or the rules made thereunder
or furnishes false information or documents during any proceedings
under this Act ;
(xviii) supplies, transports or stores any goods which he has reasons
to believe are liable to confiscation under this Act ;
(xix) issues any invoice or document by using the registration number
of another registered person ;
(xx) tampers with, or destroys any material evidence or documents ;
(xxi) disposes off or tampers with any goods that have been detained,
seized, or attached under this Act,
shall be liable to pay a penalty of ten thousand rupees or an amount
equivalent to the tax evaded or the tax not deducted under section 51 or
short deducted or deducted but not paid to the Government or tax not
collected under section 52 or short collected or collected but not paid to the
Government or input tax credit availed of or passed on or distributed
irregularly, or the refund claimed fraudulently, whichever is higher.
(2) Any registered person who supplies any goods or services or both on
which any tax has not been paid or short-paid or erroneously refunded, or
where the input tax credit has been wrongly availed or utilized,-
(a) for any reason, other than the reason of fraud or any willful
misstatement or suppression of facts to evade tax, shall be liable to a
penalty of ten thousand rupees or ten per cent. of the tax due from such
person, whichever is higher ;
(b) for reason of fraud or any willful misstatement or suppression
of facts to evade tax, shall be liable to a penalty equal to ten thousand
rupees or the tax due from such person, whichever is higher.
(3) Any person who––
(a) aids or abets any of the offences specified in clauses (i) to (xxi) of
sub-section (1) ;
(b) acquires possession of, or in any way concerns himself in
transporting, removing, depositing, keeping, concealing, supplying, or
purchasing or in any other manner deals with any goods which he knows
or has reasons to believe are liable to confiscation under this Act or the
rules made thereunder ;
(c) receives or is in any way concerned with the supply of, or in any
other manner deals with any supply of services which he knows or has
reasons to believe are in contravention of any provisions of this Act or
the rules made thereunder ;
(d) fails to appear before the officer of State tax, when issued with a
summon for appearance to give evidence or produce a document in an
inquiry ;
(e) fails to issue invoice in accordance with the provisions of this
Act or the rules made thereunder or fails to account for an invoice in his
books of account,
shall be liable to a penalty which may extend to twenty five thousand rupees.
123. Penalty for failure to furnish information of return -
If a person who is required to furnish an information return under
section 150 fails to do so within the period specified in the notice issued
under sub-section (3) thereof, the proper officer may direct, that such person
shall be liable to pay a penalty of one hundred rupees for each day of the
period during which the failure to furnish such return continues :
Provided that the penalty imposed under this section shall not exceed
five thousand rupees.
124. Fine for failure to furnish statistics -
If any person required to furnish any information or return under
section 151,—
(a) without reasonable cause fails to furnish such information or
return as may be required under that section, or
(b) wilfully furnishes or causes to furnish any information or return
which he knows to be false,
he shall be punishable with a fine which may extend to ten thousand rupees
and in case of a continuing offence to a further fine which may extend to one
hundred rupees for each day after the first day during which the offence
continues subject to a maximum limit of twenty-five thousand rupees.
125. General penalty -
Any person, who contravenes any of the provisions of this Act or
any rules made thereunder for which no penalty is separately provided for
in this Act, shall be liable to a penalty which may extend to twenty five
thousand rupees.
126. General disciplines related to penalty -
(1) No officer under this Act shall impose any penalty for minor
breaches of tax regulations or procedural requirements and in particular,
any omission or mistake in documentation which is easily rectifiable and
made without fraudulent intent or gross negligence.
Explanation.––For the purpose of this sub-section,––
(a) a breach shall be considered a ‘minor breach’ if the amount of tax
involved is less than five thousand rupees ;
(b) an omission or mistake in documentation shall be considered to
be easily rectifiable if the same is an error apparent on the face of record.
(2) The penalty imposed under this Act shall depend on the facts and
circumstances of each case and shall commensurate with the degree and
severity of the breach.
(3) No penalty shall be imposed on any person without giving him an
opportunity of being heard.
(4) The officer under this Act shall while imposing penalty in an order
for a breach of any law, regulation or procedural requirement, specify the
nature of the breach and the applicable law, regulation or procedure under
which the amount of penalty for the breach has been specified.
(5) When a person voluntarily discloses to an officer under this Act the
circumstances of a breach of the tax law, regulation or procedural requirement
prior to the discovery of the breach by the officer under this Act, the proper
officer may consider this fact as a mitigating factor when quantifying a penalty
for that person.
(6) The provisions of this section shall not apply in such cases where
the penalty specified under this Act is either a fixed sum or expressed as a
fixed percentage.
127. Power to impose penalty in certain cases -
Where the proper officer is of the view that a person is liable to a
penalty and the same is not covered under any proceedings under section 62
or section 63 or section 64 or section 73 or section 74 or section 129 or section
130, he may issue an order levying such penalty after giving a reasonable
opportunity of being heard to such person.
128. Power to waive penalty or fee or both -
The Government may, by notification, waive in part or full, any
penalty referred to in section 122 or section 123 or section 125 or any late fee
referred to in section 47 for such class of taxpayers and under such mitigating
circumstances as may be specified therein on the recommendations of the
Council.
129. Detention , seizure and release of goods and conveyances in transit -
(1) Notwithstanding anything contained in this Act, where any
person transports any goods or stores any goods while they are in transit in
contravention of the provisions of this Act or the rules made thereunder, all
such goods and conveyance used as a means of transport for carrying the
said goods and documents relating to such goods and conveyance shall be
liable to detention or seizure and after detention or seizure, shall be
released,—
(a) on payment of the applicable tax and penalty equal to one
hundred per cent. of the tax payable on such goods and, in case of
exempted goods, on payment of an amount equal to two per cent. of the
value of goods or twenty five thousand rupees, whichever is less, where
the owner of the goods comes forward for payment of such tax and
penalty ;
(b) on payment of the applicable tax and penalty equal to the fifty
per cent. of the value of the goods reduced by the tax amount paid thereon
and, in case of exempted goods, on payment of an amount equal to five
per cent. of the value of goods or twenty five thousand rupees, whichever
is less, where the owner of the goods does not come forward for payment
of such tax and penalty ;
(c) upon furnishing a security equivalent to the amount payable
under clause (a) or clause (b) in such form and manner as may be
prescribed :
Provided that no such goods or conveyance shall be detained or
seized without serving an order of detention or seizure on the person
transporting the goods.
(2) The provisions of sub-section (6) of section 67 shall, mutatis mutandis,
apply for detention and seizure of goods and conveyances.
(3) The proper officer detaining or seizing goods or conveyances shall
issue a notice specifying the tax and penalty payable and thereafter, pass an
order for payment of tax and penalty under clause (a) or clause (b) or
clause (c).
(4) No tax, interest or penalty shall be determined under sub-section
(3) without giving the person concerned an opportunity of being heard.
(5) On payment of amount referred in sub-section (1), all proceedings in
respect of the notice specified in sub-section (3) shall be deemed to be
concluded.
(6) Where the person transporting any goods or the owner of the goods
fails to pay the amount of tax and penalty as provided in sub-section (1) within
seven days of such detention or seizure, further proceedings shall be initiated
in accordance with the provisions of section 130 :
Provided that where the detained or seized goods are perishable or
hazardous in nature or are likely to depreciate in value with passage of time,
the said period of seven days may be reduced by the proper officer.
130. Confiscation of goods or conveyances and levy of penalty -
(1) Notwithstanding anything contained in this Act, if any person—
(i) supplies or receives any goods in contravention of any of the
provisions of this Act or the rules made thereunder with intent to evade
payment of tax ; or
(ii) does not account for any goods on which he is liable to pay tax
under this Act ; or
(iii) supplies any goods liable to tax under this Act without having
applied for registration ; or
(iv) contravenes any of the provisions of this Act or the rules made
thereunder with intent to evade payment of tax ; or
(v) uses any conveyance as a means of transport for carriage of goods
in contravention of the provisions of this Act or the rules made
thereunder unless the owner of the conveyance proves that it was so
used without the knowledge or connivance of the owner himself, his
agent, if any, and the person in charge of the conveyance,
then, all such goods or conveyances shall be liable to confiscation and the
person shall be liable to penalty under section 122.
(2) Whenever confiscation of any goods or conveyance is authorised by
this Act, the officer adjudging it shall give to the owner of the goods an option
to pay in lieu of confiscation, such fine as the said officer thinks fit :
Provided that such fine leviable shall not exceed the market value of the
goods confiscated, less the tax chargeable thereon :
Provided further that the aggregate of such fine and penalty leviable
shall not be less than the amount of penalty leviable under sub-section (1) of
section 129 :
Provided also that where any such conveyance is used for the carriage
of the goods or passengers for hire, the owner of the conveyance shall be
given an option to pay in lieu of the confiscation of the conveyance a fine
equal to the tax payable on the goods being transported thereon.
(3) Where any fine in lieu of confiscation of goods or conveyance is
imposed under sub-section (2), the owner of such goods or conveyance or the
person referred to in sub-section (1), shall, in addition, be liable to any tax,
penalty and charges payable in respect of such goods or conveyance.
(4) No order for confiscation of goods or conveyance or for imposition of
penalty shall be issued without giving the person an opportunity of being
heard.
(5) Where any goods or conveyance are confiscated under this Act, the
title of such goods or conveyance shall thereupon vest in the Government.
(6) The proper officer adjudging confiscation shall take and hold
possession of the things confiscated and every officer of Police, on the
requisition of such proper officer, shall assist him in taking and holding such
possession.
(7) The proper officer may, after satisfying himself that the confiscated
goods or conveyance are not required in any other proceedings under this
Act and after giving reasonable time not exceeding three months to pay fine
in lieu of confiscation, dispose of such goods or conveyance and deposit the
sale proceeds thereof with the Government.
131. Confiscation or penalty not to interfere with other punishments -
Without prejudice to the provisions contained in the Code of
Criminal Procedure, 1973, no confiscation made or penalty imposed under (2 of 1974)
the provisions of this Act or the rules made thereunder shall prevent the
infliction of any other punishment to which the person affected thereby is
liable under the provisions of this Act or under any other law for the time
being in force.
132.Punishment for certain offences -
(1) Whoever commits any of the following offences, namely :—
(a) supplies any goods or services or both without issue of any
invoice, in violation of the provisions of this Act or the rules made
thereunder, with the intention to evade tax ;
(b) issues any invoice or bill without supply of goods or services or
both in violation of the provisions of this Act, or the rules made
thereunder leading to wrongful availment or utilisation of input tax credit
or refund of tax ;
(c) avails input tax credit using such invoice or bill referred to in
clause (b) ;
(d) collects any amount as tax but fails to pay the same to the
Government beyond a period of three months from the date on which
such payment becomes due ;
(e) evades tax, fraudulently avails input tax credit or fraudulently
obtains refund and where such offence is not covered under clauses (a)
to (d) ;
(f) falsifies or substitutes financial records or produces fake accounts
or documents or furnishes any false information with an intention to
evade payment of tax due under this Act ;
(g) obstructs or prevents any officer in the discharge of his duties
under this Act ;
(h) acquires possession of, or in any way concerns himself in
transporting, removing, depositing, keeping, concealing, supplying,
purchasing or in any other manner deals with, any goods which he knows
or has reasons to believe are liable to confiscation under this Act or the
rules made thereunder ;
(i) receives or is in any way concerned with the supply of, or in any
other manner deals with any supply of services which he knows or has
reasons to believe are in contravention of any provisions of this Act or
the rules made thereunder ;
(j) tampers with or destroys any material evidence or documents ;
(k) fails to supply any information which he is required to supply
under this Act or the rules made thereunder or (unless with a reasonable
belief, the burden of proving which shall be upon him, that the information
supplied by him is true) supplies false information ; or
(l) attempts to commit, or abets the commission of any of the offences
mentioned in clauses (a) to (k) of this section,
shall be punishable––
(i) in cases where the amount of tax evaded or the amount of input
tax credit wrongly availed or utilised or the amount of refund wrongly
taken exceeds five hundred lakh rupees, with imprisonment for a term
which may extend to five years and with fine ;
(ii) in cases where the amount of tax evaded or the amount of input
tax credit wrongly availed or utilised or the amount of refund wrongly
taken exceeds two hundred lakh rupees but does not exceed five hundred
lakh rupees, with imprisonment for a term which may extend to three
years and with fine ;
(iii) in the case of any other offence where the amount of tax evaded
or the amount of input tax credit wrongly availed or utilised or the
amount of refund wrongly taken exceeds one hundred lakh rupees but
does not exceed two hundred lakh rupees, with imprisonment for a term
which may extend to one year and with fine ;
(iv) in cases where he commits or abets the commission of an offence
specified in clause (f) or clause (g) or clause (j), he shall be punishable
with imprisonment for a term which may extend to six months or with
fine or with both.
(2) Where any person convicted of an offence under this section is again
convicted of an offence under this section, then, he shall be punishable for
the second and for every subsequent offence with imprisonment for a term
which may extend to five years and with fine.
(3) The imprisonment referred to in clauses (i), (ii) and (iii) of sub-section
(1) and sub-section (2) shall, in the absence of special and adequate reasons
to the contrary to be recorded in the judgment of the Court, be for a term not
less than six months.
(4) Notwithstanding anything contained in the Code of Criminal
Procedure, 1973, all offences under this Act, except the offences referred to (2 of 1974)
in sub-section (5) shall be non-cognizable and bailable.
(5) The offences specified in clause (a) or clause (b) or clause (c) or clause
(d) of sub-section (1) and punishable under clause (i) of that sub-section shall
be cognizable and non-bailable.
(6) A person shall not be prosecuted for any offence under this section
except with the previous sanction of the Commissioner.
Explanation. - For the purposes of this section, the term “tax” shall
include the amount of tax evaded or the amount of input tax credit wrongly
availed or utilised or refund wrongly taken under the provisions of this Act,
the Central Goods and Services Tax Act, the Integrated Goods and Services
Tax Act, and cess levied under the Goods and Services Tax (Compensation to
States) Act.
133. Liability of officers and certain other persons -
(1) Where any person engaged in connection with the collection of
statistics under section 151 or compilation or computerisation thereof or if
any officer of State tax having access to information specified under subsection
(1) of section 150, or if any person engaged in connection with the
provision of service on the common portal or the agent of common portal,
wilfully discloses any information or the contents of any return furnished
under this Act or rules made thereunder otherwise than in execution of his
duties under the said sections or for the purposes of prosecution for an offence
under this Act or under any other Act for the time being in force, he shall be
punishable with imprisonment for a term which may extend to six months or
with fine which may extend to twenty five thousand rupees, or with both.
(2) Any person—
(a) who is a Government servant shall not be prosecuted for any
offence under this section except with the previous sanction of the
Government ;
(b) who is not a Government servant shall not be prosecuted for any
offence under this section except with the previous sanction of the
Commissioner.
134. Cognizance of offences -
No court shall take cognizance of any offence punishable under
this Act or the rules made thereunder except with the previous sanction of
the Commissioner, and no court inferior to that of a Magistrate of the First
Class, shall try any such offence.
135. Presumption of culpable mental state -
In any prosecution for an offence under this Act which requires a
culpable mental state on the part of the accused, the court shall presume the
existence of such mental state but it shall be a defence for the accused to
prove the fact that he had no such mental state with respect to the act charged
as an offence in that prosecution.
Explanation.—For the purposes of this section,—
(i) the expression “culpable mental state” includes intention, motive,
knowledge of a fact, and belief in, or reason to believe, a fact ;
(ii) a fact is said to be proved only when the court believes it to exist
beyond reasonable doubt and not merely when its existence is established
by a preponderance of probability.
136. Relevancy of statements under certain circumstances -
A statement made and signed by a person on appearance in
response to any summons issued under section 70 during the course of any
inquiry or proceedings under this Act shall be relevant, for the purpose of
proving, in any prosecution for an offence under this Act, the truth of the
facts which it contains,–
(a) when the person who made the statement is dead or cannot be
found, or is incapable of giving evidence, or is kept out of the way by the
adverse party, or whose presence cannot be obtained without an amount
of delay or expense which, under the circumstances of the case, the court
considers unreasonable ; or
(b) when the person who made the statement is examined as a
witness in the case before the court and the court is of the opinion that,
having regard to the circumstances of the case, the statement should be
admitted in evidence in the interest of justice.
137. Offences by Companies -
(1) Where an offence committed by a person under this Act is a
company, every person who, at the time the offence was committed was in
charge of, and was responsible to, the company for the conduct of business of
the company, as well as the company, shall be deemed to be guilty of the
offence and shall be liable to be proceeded against and punished accordingly.
(2) Notwithstanding anything contained in sub-section (1), where an
offence under this Act has been committed by a company and it is proved
that the offence has been committed with the consent or connivance of, or is
attributable to any negligence on the part of, any director, manager, secretary
or other officer of the company, such director, manager, secretary or other
officer shall also be deemed to be guilty of that offence and shall be liable to
be proceeded against and punished accordingly.
(3) Where an offence under this Act has been committed by a taxable
person being a partnership firm or a Limited Liability Partnership or a Hindu
Undivided Family or a trust, the partner or karta or managing trustee shall
be deemed to be guilty of that offence and shall be liable to be proceeded
against and punished accordingly and the provisions of sub-section (2) shall
mutatis mutandis apply to such persons.
(4) Nothing contained in this section shall render any such person liable
to any punishment provided in this Act, if he proves that the offence was
committed without his knowledge or that he had exercised all due diligence
to prevent the commission of such offence.
Explanation.––For the purposes of this section,—
(i) “company” means a body corporate and includes a firm or other
association of individuals ; and
(ii) “director”, in relation to a firm, means a partner in the firm.
138. Compounding of offences -
(1) Any offence under this Act may, either before or after the
institution of prosecution, be compounded by the Commissioner on payment,
by the person accused of the offence, to the Central Government or the State
Government, as the case may be, of such compounding amount in such manner
as may be prescribed :
Provided that nothing contained in this section shall apply to—
(a) a person who has been allowed to compound once in respect of
any of the offences specified in clauses (a) to (f) of sub-section (1) of section
132 and the offences specified in clause (l) which are relatable to offences
specified in clauses (a) to (f) of the said sub-section ;
(b) a person who has been allowed to compound once in respect of
any offence, other than those in clause (a), under this Act or under the
provisions of any State Goods and Services Tax Act or the Central Goods
and Services Tax Act or the Union Territory Goods and Services Tax
Act or the Integrated Goods and Services Tax Act in respect of supplies
of value exceeding one crore rupees ;
(c) a person who has been accused of committing an offence under
this Act which is also an offence under any other law for the time being
in force ;
(d) a person who has been convicted for an offence under this Act
by a court ;
(e) a person who has been accused of committing an offence specified
in clause (g) or clause (j) or clause(k) of sub-section (1) of section 132 ;
and
(f) any other class of persons or offences as may be prescribed :
Provided further that any compounding allowed under the
provisions of this section shall not affect the proceedings, if any, instituted
under any other law :
Provided also that compounding shall be allowed only after making
payment of tax, interest and penalty involved in such offences.
(2) The amount for compounding of offences under this section shall be
such as may be prescribed, subject to the minimum amount not being less
than ten thousand rupees or fifty per cent. of the tax involved, whichever is
higher, and the maximum amount not being less than thirty thousand rupees
or one hundred and fifty per cent. of the tax, whichever is higher.
(3) On payment of such compounding amount as may be determined by
the Commissioner, no further proceedings shall be initiated under this Act
against the accused person in respect of the same offence and any criminal
proceedings, if already initiated in respect of the said offence, shall stand
abated.