PENALTY UNDER SECTION 127, Goods and Services Tax - GST

[Sadanand Bulbule]

Plz peruse the following:

Power to impose penalty in certain cases.

127. Where the proper officer is of the view that a person is liable to a penalty and the same is not covered under any proceedings under section 62 or section 63 or section 64 or section 73 or section 74 ¹[or section 74A] or section 129 or section 130, he may issue an order levying such penalty after giving a reasonable opportunity of being heard to such person.

Query:

What is amount of penalty leviable under Section 127? And what are the specific certain cases to invoke this section?

Plz elaborate.

 

Posts / Replies

[KASTURI SETHI]

Sh. Sadanand Bulbule Ji,

Sir, The phrase, 'such penalty' is silent about the quantum of penalty. Section 127 is meant for general penalty but the quantum of penalty needs to be specified as it was specified in Central Excise Act and Central Excise Rules. Such penalty was specified in Rule 27 of Central Excise Rules, 2002 and Rule 173 of Central Excise Rules, 1944.

[Sadanand Bulbule]

Dear Sir

I fully agree with the unclear position of Section 127. But officers are proposing to levy penalty equal to tax under this section. How can officers convert this section to their convenience, rather to take revenge? 

what is the object of this section when it doesn’t speak the specific situation and the amount of penalty? Is this section not a candle on the wall? 

Let the CBIC clarify it to prevent its abuse. 

[Sadanand Bulbule]

The real problem is each officer thinks himself with great knowledge of law than his neighbor. There is no urge to learn from the intellectuals. Honest taxpayers are trembling like "scared sheep" in slaughter's shop.

May Government bestow its attention on such issues urgently.

[KASTURI SETHI]

Dear Sir,

(i) This is a flaw in the law. The words, "such penalty" must refer to specific amount of penalty. The words, "such penalty" must be replaced by "a penalty which may extend to Rs._________________." This language existed in Central Excise Act and Rules.

(ii) The word, 'such' cannot be integrated to Sections mentioned in Section 127.

(iii) The flaw should be brought to the notice of the Board with a copy to the Chairman, GST Council. This is the best option now keeping in view of the urgency.

(iv) Your proposal/representation will be in the interest of fair justice for the whole Trade and Industry.

(v) If immediate request is not sent to Govt., floodgates of litigation will open.

[Sadanand Bulbule]

Dear Sir

I shall do that. Thanks for your timely support as well.