Can penalty under section 74 and 122(1) be simultaneous levied?

 

In cases where a person deliberately suppresses their turnover by not issuing invoices or disclosing supplies made, they may face several penalties under the Goods and Services Tax (GST) Act of India. These penalties are apart from the penalty under Section 74, which is levied for non-payment or short payment of tax.

Section 122(1)(i) of the GST Act imposes a penalty on any person who supplies goods or services without issuing an invoice or issues an incorrect or false invoice with regard to any such supply. This penalty is applicable in cases where an individual does not issue invoices for their supplies or provides false or incorrect information in the invoices issued.

Section 122(1)(x) of the Act imposes a penalty on individuals who falsify or substitute financial records or produce fake accounts or documents or furnish any false information or return with an intention to evade payment of tax due under the Act. This penalty is applicable when an individual deliberately provides false or misleading information in their financial records or tax returns to evade payment of taxes.

Section 122(1)(xv) of the GST Act imposes a penalty on individuals who suppress their turnover leading to tax evasion under the Act. This penalty is applicable when an individual deliberately hides their actual turnover to avoid paying taxes.

It is important to note that Section 75(13) of the GST Act states that no penalty for the same act or omission shall be imposed on the same person under any other provision of the Act where a penalty is already imposed under Section 73 or Section 74. However, the penalties mentioned above are for different acts or omissions, and hence Section 75(13) may not apply in this case.

In the case of Krishna Poduval 2005 (4) KLT 947, the Kerala High Court held that penalties under Section 76 for failure to pay service tax and Section 78 for the suppression of the value of taxable services can be levied as the incidence of penalties are distinct and separate. This means that penalties under Section 122(1)(i), Section 122(1)(x), and Section 122(1)(xv) can all be levied separately on individuals who suppress their turnover by not issuing invoices or disclosing supplies made.

In conclusion, individuals who deliberately suppress their turnover by not issuing invoices or disclosing supplies made may face penalties under Section 122(1)(i), Section 122(1)(x), and Section 122(1)(xv) of the GST Act, apart from the penalty under Section 74 for non-payment or short payment of tax. It is essential for individuals to comply with the GST Act's provisions and maintain accurate financial records and tax returns to avoid penalties and legal consequences.