员工并非注册人或纳税人，因此不能对其处以罚款。

Held by Hon’ble High Court of Bombay

In the matter of Shantanu Sanjay Hundekari Vs. Union of India(WRIT PETITION (L) NO. 30198 OF 2023)

The Petitioner is an employee of a Company M/s MLIPL, which is appointed as steamer agent of M/s Maersk. The petitioner was assisting M/s MLIPL against GST Compliance and was holding power of attorney to represent before tax authority on behalf of M/s Maersk. During the course of investigation, it was alleged that M/s Maersk has availed ineligible ITC and has made wrongful distribution of ITC. A SCN was issued to the petitioner asking to pay INR 1561 Crores equivalent to the tax alleged to be evaded by M/s. Maersk. Notice was issued under section 74 of CGST Act invoking Section 122(1A) and section 137 of CGST Act.

Hon’ble High Court anaylsised that Provisions of Section 122(1A) can be invoked against a taxable person who would be in a legal position, to retain the benefit of tax, and at whose instance, such transaction is conducted.  In the given case, the petitioner is merely an employee and cannot fall within the purview of the said provision, as the petitioner cannot be a ‘taxable’ or a ‘registered person’ within the meaning and purview of the CGST Act so as to retain such benefits as the provision ordains. Further, Show cause notice is issued under Section 74 of CGST Act. Section 74 is not a penal provision, whereas Section 137 falls under Chapter XIX which provides for ‘offences and penalties’.  Therefore, as to how such penal provision in Section 137 could be foisted against the petitioner, when the show cause notice is itself a demand cum show cause notice. Therefore, impugned show cause notice is rendered bad and illegal, deserving it to be quashed and set aside. 

Read Also: Amendments to the CGST Rules

1. 案情简介

• In the given case, the petitioner is an individual who is an employee of the Company M/s. Maersk Line India Pvt. Ltd. (“MLIPL”).
• M/s MLIPL is a company having its principal place of business at Mumbai.  
• The petitioner was working as a Taxation Manager with M/s MLIPL. The Company was  appointed as Steamer agent of Maersk A/S (“Maersk”), a company incorporated in Demark.
• M/s Maersk is engaged in the shipping business involving containerized transportation of goods, through vessels across the globe. 
• The petitioner, as a Taxation Manager, rendered assistance to M/s Maersk in its compliance with taxation laws including the GST.  
• The petitioner also holds power of attorney to represent Maersk before the Tax Authorities.  However, the petitioner was not in-charge of the day-to-day business of Maersk. 
• The petitioner also assisted the investigations being conducted by the tax authorities in matter of M/s Maersk such as responding to the summons, presenting evidence and furnishing a list of witnesses whose statements could be recorded. 
• After such inquiry, the respondents made allegations that M/s Maersk has wrongly availed ITC of Rs.1561 crores. Further, M/s Maersk has also made a wrongful distribution of ITC.  
• The Petitioners are foisted with a show cause notice under Section 74 of the Central Goods and Services Tax Act, 2017 wherein they are required to pay an amount of INR 3731 Crores towards penalty.
• Such an amount is the tax amount stated to be defaulted by their employer.
• The petitioner has challenged the demand cum show cause notice issued by DGGI. As per SCN, the petitioners are called upon to show cause as to why a penalty equivalent to the tax alleged to be evaded by M/s. Maersk should not be imposed upon the petitioners.

Read Also: Refund of accumulated Input Tax Credit of Compensation Cess

2. 相关法律摘录

Relevant legal extract of the GST law is reiterated below for ready reference:

1. “Section 122.  Penalty for certain offences - 

….

(1-A) Any person who retains the benefit of a transaction covered under clauses (i), (ii), (vii) or clause (ix) of sub-section (1) and at whose instance such transaction is conducted, shall be liable to a penalty of an amount equivalent to the tax evaded or input tax credit availed of or passed on. ……………..”

2. “Section 137.  Offences by companies 

(1) Where an offence committed by a person under this Act is a company, every person who, at the time the offence was committed was incharge of, and was responsible to, the company for the conduct of business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. 

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any negligence on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. 

……”

3. Contention of the Petitioner

The Petitioner has contended that:

• The petitioner has not personally availing the benefit of any ITC. Also, show cause notice does not allege that any personal benefit is achieved by the petitioner.
• Show Cause Notice is making allegations against M/s Maersk. 
• However, it has incidentally invokes the provisions of Section 122(1A) and Section 137 of the CGST Act to threaten imposition of penalty on the petitioner and to initiate prosecution against the petitioner, who is an individual.
• Since no personal benefit has been availed by the petitioner therefore, invoked provisions do not apply to the petitioner.
• M/s Maersk is a foreign company which does not have any employee or fixed establishment in India.
• Accordingly, solely for the purpose of representing and acting on behalf of M/s Maersk, the petitioner was given power of Attorney. 

• As per the department's allegation, credit should have been proportionately allocated among eleven different registrations of M/s Maersk in ten States.
• The petitioner was not the decision making authority on Maersk's businesses, and was not in-charge of or responsible for the business of M/s Maersk. The petitioner was merely representing the company before tax authority to provide factual information and data.
• All legal issues raised to the Petitioner were replied to by the petitioner as per the legal opinion obtained by M/s Maersk. 
• Further, the petitioner was neither a legal expert nor had any in-depth legal understanding of GST laws or its interpretation.  Thus, the role of the petitioner was essentially to assist and cooperate with the investigation authorities and provide clarification relating to distribution of input tax credit.
• The GST Council in its 38th meeting held on 18 December 2019 proposed insertion of sub-section (1A) to Section 122, to specifically address the cases of fake invoices. Provisions of Section 122(1A) was introduced with effect from 1 January, 2021.
• As per the provisions, a person shall be liable to a penalty of an amount equivalent to the tax evaded or input tax credit availed, or passed on, if he retains the benefit of certain fraudulent transactions, and when such transactions are conducted at his instance. 
• In the given case, the allegation is made against the petitioner in Show Cause Notice that the petitioner has “retained the benefit of the said evasion of GST by Maersk” and at the time of evasion of tax by Maersk, the petitioner was in-charge of and responsible for Maersk's business. 
• Grounds of issuance of show cause notice to the petitioner invoking Section 122(1A) and Section 137 of the CGST Act do not apply to the petitioner, absent a suggestion that any personal benefit was availed by the Petitioner.  
• Provisions of section 122(1A) of the CGST Act is not applicable as the basic ingredients primary benefit of the ITC was in any manner not availed by the petitioner. 
• If it claimed that the petitioner has retained the benefit of GST evasion, and that the petitioner was in-charge of and responsible to Maersk, for the conduct of its business, there was no basis as set out to support such allegation.  

4. Contention of the Respondent

The respondent contended that:

• There was responsibility fastened on the petitioner in regard to the affairs of M/sMaersk. Hence, the petitioner cannot disown his involvement in the loss of revenue.
• The petitioner had tendered statements on behalf of M/s Maersk as its power of attorney holder and as a Senior Tax Operations Manager.
• Hence, the petitioner ought to have taken responsibility for the compliance of the statutory provisions of the GST laws. In this case, there was certainly connivance of the petitioner in the evasion of tax by M/s Maersk, as the petitioner was assigned the work of compliance under GST law.
• The company is not coming forward to clear the tax dues and therefore, the show cause notice was rightly pressed against the petitioner, as the petitioner would be equally responsible for his actions, although in the capacity as a power of attorney holder. 

由于缺乏任何关于交叉授权的通知，因此不存在交叉授权。

The Hon’ble High Court has made following analysis:

• As per show cause notice, the allegation against the petitioner is in his capacity as a Senior Tax Operations Manager of M/s Maersk.  
• He is called upon to show cause as to why penalty should not be imposed upon him under Section 122(1A) of the CGST Act, 2017 where M/s Maersk had committed offences under Section 122(1)(i) of the Act.
• It is alleged that the petitioner has committed offences which led to the evasion of the GST by M/s Maersk, for the reason that the invoices raised by M/s Maersk on its supplies were not in accordance with the provisions of GST law.
• It is alleged that the benefit of the said evasion of GST  was retained by the noticees (which includes the petitioner).  At the time of evasion of tax by M/s Maersk, the petitioner and the other employees were in charge of, and were responsible to Maersk for the conduct of the business of Maersk.
• The petitioner and other employees were very well aware about the willful omission and commission from the tax department resulting in tax (GST) evasion by M/s Maersk. Therefore, the petitioner and such other employees had rendered themselves liable to proceedings under Section 137(1) and Section 137(2) of the CGST Act, 2017.
• The question before the Court is whether the provisions of Section 122(1-A) of the CGST Act as also Section 137(1) and 137(2) would stand attracted to issue the impugned SCN against the petitioner, who is merely an employee of MLIPL and a power of attorney of Maersk. 

1. Applicability of Section 122(1A) of CGST Act:

• 根据第122(1A)条的规定，任何保留了第(1)款第(i)、(ii)、(vii)或(ix)项所涵盖交易利益，且在该等交易系由其促成的情况下，该人（必须为纳税人）“应承担相当于所逃避税款或已利用或转嫁的进项税额的罚款”。
• 因此，第(1-A)款适用于纳税人。
• 立法意图明确，即属于第122(1-A)条适用范围的人必须是纳税人，且是保留了《CGST法案》第122(1)条所列交易利益的人。
• 此外，若某人并未保留所述交易的利益，和/或该等交易并非由其促成，则第122(1-A)条亦不适用。
• 相关条款表明，此类人员仅能是处于法律地位、能够保留税收利益且由其促成该交易的纳税人。
• 若缺乏这些基本要素，所发出的任何此类性质的通知均属违法。
• 在本案中，请愿人仅为一名员工，不属于上述条款的适用范围，因为请愿人并非《CGST法案》含义和范围内的“纳税人”或“注册人”，无法保留该条款所规定的利益。
• 因此，对请愿人援引第122(1-A)条是不成立的。

2. 《CGST法案》第137条的适用性

• 关于《CGST法案》第137条的适用性，第137条涉及“公司犯罪”。第(1)款规定，当《CGST法案》项下的犯罪由公司实施时，在犯罪发生时负责公司业务经营的每位负责人，以及公司本身，均应被视为有罪，并应据此受到追究和处罚。
• 无法理解为何在针对请愿人的通知中，除第122(1-A)条外，还能援引第137条，尤其是考虑到该通知是根据《CGST法案》第74条发出的。
• 第74条属于《CGST法案》第XV章，涉及“需求与追缴”，规定了“因欺诈、故意虚假陈述或隐瞒事实而导致未缴、少缴、错误退税或错误利用进项税额的税款确定”。
• 第74条并非惩罚性条款，而第137条属于规定“犯罪与处罚”的第XIX章。
• 因此，当通知本身为需求兼告知通知时，如何能将第137条中的惩罚性条款强加于请愿人。
• 即便假设第137条可援引或适用于请愿人，根据第74条发出的需求兼告知通知也不应包含第137条项下的程序，因为此类程序属于必然涉及第134条适用性的起诉性质。
• 管辖权不应如此混淆，更不应以此向请愿人强加税务机关在通知中明确归咎于公司的金钱责任。
• 综上所述，通知的相关内容清楚表明，不具备根据《CGST法案》第74条发出通知以援引第122(1-A)条和第137条针对请愿人的基本管辖要求。

6. Order

尊敬的高等法院裁定，所涉通知无效且违法，应予撤销。