100% Penalty cannot be levied under Section 73 of the CGST Act, 2017

Case Details:

Issue- In the above case, show cause notice was issued under Section 73 of CGST Act, 2017 whereas penalty at 100% is specified therein. Further, the impugned order made reference both to Sections 73 & 74. Without prejudice, learned counsel submits that the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand.

Held – On comparing the show cause notice and the impugned order, it is evident that the show cause notice was issued under Section 73 although 100% penalty is mentioned therein. In the summary of the impugned order, reference is made to Section 73, whereas the detailed order also makes reference to Section 74. Thus, the impugned order dated 29.07.2023 is set aside and the matter is remanded for reconsideration on condition that the petitioner remits 10% of the disputed tax demand.