Penalty provisions u/s 171(3A) not retrospective
Pushpak Chauhan vs Harish bakers & confectioners Pvt Ltd
No penalty had been prescribed for violation of the provisions of Section 171 (1) , therefore, the Respondent was issued show cause notice to state why penalty should not be imposed on him for violation of the above provisions as per Section 122(1)(i) as he had apparently issued incorrect or false invoice while charging excess consideration and GST from the buyers.
However, from Section 122(1)(i) it is clear that the violation of the provisions of Section 171 (1) is not covered under it as it does not provide penalty for not passing on the benefits of tax reduction and ITC and hence the above penalty cannot be imposed for violation of the anti-profiteering provisions made under Section 171 of the above Act.
It is further revealed that vide Section 112 of the Finance Act, 2019 specific penalty provisions have been added for violation of the provisions of Section 171(1) which have come in to force w.e.f. 01.01.2020, by inserting Section 171(3A).
Since, no penalty provisions were in existence between the period W.e.f. 16.11.2017 to 31.03.2018 when the Respondent had violated the provisions of Section 171(1), the penalty prescribed under Section 171(3A) cannot be imposed on the Respondent retrospectively. Accordingly, the notice dated 01.01.2019 issued to the Respondent for imposition of penalty under Section 122(1)(i) is hereby withdrawn and the present penalty proceedings launched against him are accordingly dropped.