The Nagpur Bench of the Bombay High Court has granted interim protection to a director against recovery of penalty imposed under Section 122(1A) of the CGST Act, while examining whether such provisions can be invoked against an individual who could not have retained the benefit arising from the alleged transaction.
The bench of Justice Urmila Joshi-Phalke and Justice Nivedita P. Mehta has granted interim protection in a GST penalty matter while considering a challenge to the imposition of penalty under the CGST framework while relied on an earlier precedent affirmed by the Supreme Court concerning the scope of Sections 122(1A) and 137 of the GST Act and their application to individuals who are merely employees of a company.
The petitioner argued that the issue stood covered by the Bombay High Court’s earlier decision in Shantanu Sanjay Hundekari v. Union of India, which had subsequently been affirmed by the Supreme Court. Reliance was specifically placed upon observations of the Apex Court dealing with the interpretation of Sections 122(1A) and 137 of the GST Act.
The earlier judgment had examined whether an employee could be subjected to proceedings and liabilities arising from acts attributed to the company itself. The Supreme Court had upheld the High Court’s reasoning that the jurisdictional requirements for invoking the relevant provisions were not attracted and that principles of vicarious liability could not simply be read into Sections 122 and 137 of the CGST Act.
The Supreme Court had also taken note of the disproportionate nature of fastening an enormous tax demand on an individual employee when the liability itself pertained to the company. The Court had observed that the respondent in that matter was merely an employee and could not have been burdened with liability amounting to ₹3,731 crore.
Referring to those observations, the Bombay High Court stated that it had considered the findings recorded by the Supreme Court in the earlier litigation. At the same time, counsel appearing for the respondents sought time to obtain instructions and respond on the issue raised by the petitioner.
Pending further proceedings, the Court granted interim relief and directed that no coercive action should be taken by the authorities for recovery of the penalty amount until the filing of the reply by the respondents. The matter has been directed to be listed after the summer vacation.
Case Details
Case Title: Shri Girish Kumar Raval Vs. Union of India & Ors.
Citation: JURISHOUR-1353-HC-2026(ALL)Â
Case No.: WRIT PETITION NO. 4045 OF 2026
Date: 08/05/2026
Counsel For Petitioner:Â Bharat Raichandani, Advocate
Counsel For Respondent: Ketki Jaltare Vaidya, Advocate
