Gauhati High Court grants interim relief where GST penalty under Section 122 conflicts with CBIC Circular No. 171/03/2022-GST

The Gauhati High Court has issued an interim protection order in a legal dispute arising from a direct contradiction between penalty impositions under Section 122 of the Goods and Services Tax (GST) framework and the guidelines outlined in CBIC Circular No. 171/03/2022-GST. This judicial action provides immediate relief to taxpayers who faced enforcement measures that seemingly bypassed official departmental clarifications regarding penalty applications. Statutory penalties under Section 122 of the GST legislation apply to specific offences such as issuing invoices without actual supply or evading tax dues.

However, administrative circulars issued by the Central Board of Indirect Taxes and Customs (CBIC) often provide crucial interpretative boundaries to prevent double jeopardy or disproportionate penal actions in transit and registration cases. When departmental adjudications conflict with these binding circulars, taxpayers frequently seek judicial review to halt coercive recovery proceedings. Chartered accountants and tax practitioners should review ongoing client penalty notices to identify similar discrepancies between statutory enactments and the provisions of CBIC Circular No.

171/03/2022-GST. Legal advisors ought to prepare writ petitions for affected clients seeking similar interim protection while the court examines the substantive merits of the conflict. In short, monitoring these judicial precedents is vital for safeguarding corporate clients from erroneous tax recovery actions.