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TMI Blog2022 (6) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... the Code in a disciplinary proceedings initiated against the employees, would not attract the GST and the penalty referred therein would only refer to the penalty imposed in the course of trade or commerce; and hence, the imposition of GST on the penalty is illegal and is liable to be set aside. Appeal disposed off. - W.A. Nos.1223, 1226, 1222, 1227, 1224, 1230, 1231 & 1238 of 2022 And C.M.P. Nos.7772, 7773, 7774, 7777, 7782, 7786, 7790 & 7827 - - - Dated:- 29-4-2022 - Honourable Mr.Justice R. Mahadevan And Honourable Mr.Justice J.Sathya Narayana Prasad For the Appellants in all W.As. Versus Mr.K.Sathish Kumar For the Respondents all W.As. : Mr.V.Prashanth Kiran Government Advocate (Taxes) COMMON JUDGMENT R.MAHA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of the penalty levied in the disciplinary proceedings, are against clause 5(e) of the schedule II of the Central Goods Sales Tax Act, 2017. It is also submitted that the respondents had already paid the amount of shortage as well as penalty with GST, without any protest and thereafter, filed the writ petitions and asked for refund of GST, which is a clear case of estoppel. The learned counsel further submitted that the stock shortage was admitted and the shortage amount was also paid; in such an event, no domestic enquiry is necessary; and therefore, the orders of the authority imposing a lenient and minor punishment of levying penalty, without affecting the service condition of the respondents, are perfectly justified. However, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant paragraphs of the said order are extracted below: 32.The next question that arises for consideration is whether the penalty imposed in a disciplinary proceedings in a service matter is liable for GST, in terms of Section 7(1) (d) or 7(1-A) of the GST Act, 2017. Admittedly the said Section 7(1) (d) was not in force as on the date of passing the impugned order in the month of September 2020. The said Section was omitted with effect from 01.02.2019. The respondent, in his counter clearly stated that the notice of collection of GST was issued under Section 7(1) (d) alone. Therefore, without any provision/authority, the third respondent has issued the show cause notice to collect the GST, which is totally illegal. 33.Second ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Rule 7(b) (xiv) of the Code, in a disciplinary proceedings initiated against the employees would not attract the GST and the penalty referred therein would only refer the penalty imposed in the course of trade or commerce. 36.As such in the present case the penalty was imposed in a disciplinary proceedings which cannot be construed that the penalty imposed in the course of trade or commerce for the imposition of GST. 37.This Court finds substance in the arguments made by Mr.R.V.Rajkumar, learned counsel appearing for the petitioners in some of the writ petitions in the batch and this Court recorded its appreciation for his assistance in the present writ petition. 38.Therefore, I am of the opinion that the GST imposed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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