Section 122(1A) penalty not imposable on employees

Facts: The adjudicating authority held that the Company wrongfully availed and passed ITC by issuing fake invoices. The authority also imposed personal penalty under Section 122(1A) of the CGST Act on Petitioners (CFO, CEO and Joint MD of the Company).   Ruling: The High Court held that Section 122(1A) read with Section 122(1) only applies to ‘taxable person’ who retains benefit of specified fraudulent transactions and at whose instance such transactions are conducted. The Court, relying on its earlier decision in Shantanu Sanjay Hundekari vs. UOI, 2024-VIL-283-BOM (also affirmed by the Supreme Court), held that penalty is not imposable on employees or officers as they are not taxable persons and there are no clear findings of them personally retaining any benefit.   Amit Manilal Haria v. JC CGST, 2026-VIL-196-BOM   Correctness: This ruling incorrectly restricted application of Section 122(1A) to ‘taxable person’ while provision clearly covers ‘a person’. However, the Court rightly quashed penalty imposed on employees as factually they did not retain any benefit nor transactions were conducted at their instance.