The Bombay High Court has granted interim protection to a former director of a company against a GST penalty imposed under Section 122(1A) of the Central Goods and Services Tax (CGST) Act, 2017.
The bench of Justice Suman Shyam and Justice Advait M. Sethna while taking note of earlier decisions concerning the applicability of Section 122(1A) to individuals and company directors, suspended the operation of the impugned penalty order against the petitioner until further orders.
The central issue before the High Court was whether Section 122(1A) of the CGST Act can be invoked against an individual, including a present or former director of a company, in circumstances where the alleged GST contravention relates to the affairs of the company.
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The petitioner specifically contended that Section 122(1A) could not be applied to an individual in the manner adopted by the GST authorities. The challenge was therefore directed not merely at the quantum of penalty, but at the very legal basis for fastening liability upon the petitioner personally.
An important factual circumstance placed before the Court was that the petitioner had resigned from the position of director of the company. Despite his resignation, the GST authority proceeded to pass the March 17, 2026 order imposing a penalty against him.
The petitioner argued that, in view of the existing Bombay High Court precedents and his status as a former director, the continuation of the impugned proceedings and directions against him was legally unsustainable. He therefore sought interim protection from the Court pending adjudication of the writ petition.
The High Court consequently issued notice to the respondents, making the matter returnable on August 6, 2026. The State waived service of notice on one of the respondents, while the Court directed that notice be issued to the remaining respondents. The petitioner was also directed to furnish copies in the Registry for issuance of notice.
After hearing the parties on the petitioner’s request for interim relief, the Division Bench considered the facts of the case along with the earlier Bombay High Court rulings relied upon by the petitioner.
The Court specifically took into account the decisions in Shantanu Sanjay Hundekari and Amit Manilal Haria. Having regard to those decisions and the circumstances before it, the Bench ordered that, as an ad-interim measure, the operation of the March 17, 2026 impugned order, insofar as it concerned the writ petitioner, would remain suspended until further orders.
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