"Penalty u/s 125 of CGST Act, 2017 can not be imposed if terms of the Show Cause Notice have been complied with"

FACTS & SUBJECT MATTER: The Petitioner was served the Show Cause Notice under Section 46 of the Central Goods and Service Tax Act, 2017 by the Commissioner of State Tax where they were asked to furnish returns within 15 days in order to withdraw the proceedings.
Subsequently, the Petitioner furnished the returns within the time prescribed in the SCN. However, the Respondent passed the impugned Order imposing penalty under Section 125 of the CGST Act, recorded the date of reply submitted by the Petitioner, and returned the findings stating that no reply was furnished by the Petitioner.

CASE LAW: M/s. Rathore Building Material v. Commissioner of State tax [Writ Tax No 136 of 2023 dated December 1, 2023]

ISSUE : Whether the penalty u/s 125 of CGST Act, 2017 be imposed when the Petition complied with the terms of the SCN?

HELD: (1) Observed that admittedly since the petitioner had complied with the terms of the show cause notice by furnishing the returns,
there was no lawful justification to impose the penalty.
(2) The impugned orders dated 10.02.2023 and the order dated 14.03.2023 are contrary to law and passed on non application of mind.
(3) In the wake of preceding discussion, the impugned order
dated 10.02.2023 and the order dated 14.03.2023 are liable to be set aside and are set aside.
(4) The writ petition (tax) is allowed.

Click to download Order in the case of M/s. Rathore Building Material v. Commissioner of State tax [Writ Tax No 136 of 2023 dated December 1, 2023] .

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