The Gauhati High Court restrained further action on a separate penalty notice issued to a partner, finding prima facie that it was unnecessary when the firm itself faces proceedings for the same credit.
The Gauhati High Court has restrained tax authorities from acting on a show cause notice that proposes a penalty under Section 122(1A) of the GST Act on a partner individually, when the partnership firm is already facing proceedings to recover the same input tax credit (ITC) [Shiv Kumar Mittal v. Union of India & Ors., 2026-juristway.com-3367-HC(Gauhati)-GST].
Justice Soumitra Saikia passed the interim order on a writ petition by a partner of G.M. Coke Industries, whose other partner is his wife. The demand‑cum‑show cause notice dated 30 Sep 2026 was issued by the Joint Director of the Directorate General of GST Intelligence, Guwahati Zonal Unit. It alleges that the firm availed ITC of ₹16,21,12,454 on invoices and e‑way bills of 17 suppliers without receiving the goods or services.
Section 122(1A) of the Act makes a person who retains the benefit of certain specified transactions, and at whose instance they are conducted, liable to a penalty equal to the tax evaded or the ITC availed or passed on.
The petitioner argued that the ITC was availed by the firm, against which a notice for recovery had already been issued, and that there was no reason to proceed against him solely because he is a partner. Relying on a Supreme Court ruling, he submitted that, unlike a company, partners are not distinct from the firm, and the firm’s liability extends jointly and severally to them.
The Court observed that, where proceedings including penalty had been initiated against the firm for the ITC it allegedly claimed wrongly, separate proceedings against one partner for the same benefit “does not appear to have been necessary in the view of the Court”.
Notice was issued, returnable in four weeks, and notice on the interim prayer was made returnable on 9 Dec 2026. Until the next date, the respondents will not initiate any further action on the show cause notice. The matter is listed again on 9 Dec 2026.
2026-juristway.com-3367-HC(Gauhati)-GST
