Can Penalty under Section 122 be levied for same offence alongwith the penalty under Section 73/74 CGST Act, 2017. Section 75(13) of CGST Act, 2017 is at times lost sight of which provides that where any penalty is imposed under section 73 or section 74, no penalty for the same act or omission shall be imposed on the same person under any other provision of this Act. Therefore, if penalty for any offence has been levied under section 73/74 then in such case penalty for the same act or omission cannot be imposed on the same person under any other provision of the Act. However, this principle comes with a rider that although no two penalties should be levied for same act or omission on same person but if the ingredient of two offences are different then the privilege is not applicable.
If proceedings initiated under Section 73/74 for recovery of tax and interest then penalty has to be recovered under section 73/74 only
If proceedings are initiated under Section 73/74 then penalty has to be levied as per the provisions prescribed under the respective sections. There cannot be a case wherein tax and interest are recovered under Section 73/74 and penalty is recovered under section 122.
It would be apt to highlight recent judgement of High Court of Kerala in the matter of Muhammed Kochukudiyil Ishabeevi Alias Isha Shaefi v. State Tax Officer (Intelligence)-[2020] 121 taxmann.com 265 wherein the matter was whether taxpayer has the right to opt for payment of tax under section 74 and at the same time not to opt for penalty under the Section 74. The High Court held that If option to pay tax is acted upon under Section 74, then penalty under section 74 has also to be paid. Th relevant Extract of the decision of the Hon’ble High Court is as under-
On a consideration of facts and circumstances of the case and the submissions made across the Bar, I find that the contention of the petitioner that she should be exempted from the requirement of paying interest and penalty while availing the option of payment of tax for the purposes of avoiding the show cause notice cannot be accepted. The scheme of making a payment of tax together with interest and 15% of the amount as penalty envisaged under section 74 is for the purposes of enabling an assessee to avoid the show cause notice contemplated under the said provision. What is offered to the petitioner under the provision is an option of either (i) paying the tax intimated by the statutory authorities, together with interest thereon and a fixed amount towards penalty, in which event a show cause notice would not follow or (ii) denying her liability to tax, interest and penalty and contest the show cause notice that would follow. The petitioner, however, wants to get the best of both worlds by opting for the former course and simultaneously obtaining an exemption from the requirement of payment of interest and penalty amounts intimated to her by the Department. In my view, such an exercise is not permissible in terms of the Statute. When the scheme under section 74 for avoiding a show cause notice is one that is optional to an assessee, the assessee has either to opt for it or look away from it. If she opts for the scheme, she has to comply with the terms under which the option is made available under the statute. She cannot seek a variation of the said scheme.
This also applies for the revenue that once they opted for proceedings under Section 73/74 then they cannot provide that they would recover tax and interest under section 74 and penalty under section 122 of CGST Act, 2017. Once the provisions of Section 74 have been opted for then in such case penalty under section 74 would be automatic and penalty under any other section for same offence and on the same person cannot be levied.
No Two penalties for same act or omission on same person but if the ingredient of two offences are different then the privilege not applicable –
However, this principle comes with a rider that no two penalties should be levied for same act or omission on same person but if the ingredient of two offences are different then the privilege is not applicable. The relevant cases giving an understanding of the above principle are as follows:
Case-1-Meaning of “Same Offence”-Principle in American Law
“………. The proliferation of technically different offences encompassed in a single instance of crime behaviour has increased the importance of defining the scope of the offence that controls for purposes of the double jeopardy guarantee.
Distinct statutory provisions will be treated as involving separate offences for double jeopardy purposes only if “each provision requires proof of an additional fact which the other does not” (Blockburger v. United States, (1931) 284 US 299, 304). Where the same evidence suffices to prove both crimes, they are the same for double jeopardy purposes and the clause forbids successive trials and cumulative punishments for the two crimes. The offences must be joined in one indictment and tried together unless the defendant requests that they be tried separately. (Jeffers v. United States, (1977) 432 US 137).” (See “Double Jeopardy” in the Encyclopedia of Crime and Justice vol. 2 (p.630) 1983 Edn. By Sanford H. Kadish: The Free Press, Collier Mac Millan Publishers, London). The expressions “the same offence”, “substantially the same offence”, “in effect the same offence” or “practically the same”, have not done much to lessen the difficulty in applying the tests to identify the legal common denominators of “same offence”.
Friedland in “Double Jeopardy” (Oxford 1969) says at page 108:
“The trouble with this approach is that it is vague and hazy and conceals the thought processes of the Court. Such an inexact test must depend upon the individual impressions of the judges and can give little guidance for future decisions. A more serious consequence is the fact that a decision in one case that two offences are `substantially the same’ may compel the same result in another case involving the same two offences where the circumstances may be such that a second prosecution should be permissible……”
Case-2-Ranjit Singh Alias Jeeta vs Union Of India And Another on 11 December, 2009 Punjab-Haryana High Court-Same act should constitute an offence having the same ingredients whether in the same statute or different statute
8. In order that the prohibition is attracted the same act must constitute an offence under more than one Act. If there are two distinct and separate offences with different ingredients under two different enactments, a double punishment is not barred.
On the face of it, both the statutes and the provisions thereof operate in different fields. Different ingredients have been provided for levy of penalty for different offences, which do not over-lap each other, even if the facts emanating the proceedings under the two statutes may be common.
If the facts of the present case are considered in the light of enunciation of law on the principles of double jeopardy, as referred to above, the only conclusion which can be arrived at is that the levy of penalty on the appellant under the 1973 Act cannot be said to be barred on account of principle of double jeopardy, as the proceedings initiated either by the authorities under the 1962 Act or under the 1973 Act cannot be held to be on account of prosecution and conviction by a court of law, as is required to be established and further the same being under two different statutes, where ingredients for levy of penalty are altogether different
Case-3-Assistant Commissioner Of … vs Krishna Poduval on 20 October, 2005-Kerala High Court -Whether penalty for failure to pay Service Tax under Section 76 and Penalty for suppression of value of taxable service are same offence or different offences
11. The penalty imposable under Section 76 is for failure to pay service tax by the person liable to pay the same in accordance with the provisions of Section 68 and the Rules made thereunder, whereas Section 78 relates to penalty for suppression of the value of taxable service. Of course these two offences may arise in the course of the same transaction, or from the same act of the person concerned. But we are of opinion that the incidents of imposition of penalty are distinct and separate and even if the offences are committed in the course of same transaction or arises out of the same act, the penalty is imposable for ingredients of both the offences. There can be a situation where even without suppressing value of taxable service, the person liable to pay service tax fails to pay. Therefore, penalty can certainly be imposed on erring persons under both the above Sections, especially since the ingredients of the two offences are distinct and separate. Perhaps invoking powers under Section 80 of the Finance Act, the appropriate authority could have decided not to impose penalty on the assessee if the assessee proved that there was reasonable cause for the said failure in respect of one or both of the offences. However, no circumstances are either pleaded or proved for invocation of the said Section also. In any event we are not satisfied that an assessee who is guilty of suppression deserves such sympathy. As such, we are of opinion that the learned Single Judge was not correct in directing the 1st appellant to modify the demand withdrawing penalty under Section 76. Therefore, the judgment of the learned Single Judge, to the extent it directs the first appellant to modify Ext.P1 by withdrawing penalty levied under Section 76, is liable to be set aside and we do so. The cumulative result of the above findings would be that the Writ Petitions are liable to be dismissed and we do so. However, we do not make any order as to costs.
Case-4-Custom, Excise & Service Tax Tribunal M/S Safe & Sure Marine Services … vs Commissioner Of Service Tax, … on 31 August, 2013-Levy of Penalty under 76, 77 and 78
The last issue for consideration is regarding the penalties imposed on the appellant. Penalties have been imposed under Sections 76, 77 and 78 of the Finance Act, 1994. Penalty under Section 76 has been imposed for the default in payment of Service Tax and under Section 77 for delay in submission/non-submission of ST-3 Returns. Whenever there is default in payment of Service Tax or delay in payment of Service Tax, the provisions of Section 76 are automatically attracted. There is no mens rea is required to be proved for imposition of penalty under the said section as the language of the said section does not prescribe or stipulate any such requirement. Therefore, imposition of penalty under the said Section is sustainable in law. As regards the penalty under Section 77, same is for non-filing of returns and non-compliance to other statutory provisions. In this case also, no mens rea is required to be established and mere violation of the statutory provisions would suffice. Therefore, as held by the hon’ble Apex Court in the Gujarat Travancore Agency case [1989 (3) SCC 52] and Chairman, SEBI vs, Shriram Mutual Fund case [2006-TIOL-72-SC-SEBI], there cannot be any challenge to the imposition of penalties under these provisions. With regard to the penalty equivalent to the amount of Service Tax imposed under Section 78 of the Finance Act, 1994, in the present case as held by us in the preceding paragraphs, the appellant has suppressed the facts of rendering the service and collection of service tax in a few cases and even where they had collected the Service Tax, they did not remit the same to the exchequer. Therefore, there is suppression and willful mis-statement of facts on the part of the appellant with an intent to evade Service Tax. Hence, the mandatory penalty under Section 78 is justified. The hon’ble High Court of Kerala in Krishna Poduval case [2006 (1) STR 185 (Ker)] and the hon’ble Punjab & Haryana High Court in Pannu Property Dealers case [2011 (24) STR 173] have also held that penalties under section 76 and 78 can be imposed on the same transaction since the ingredients of the two offences which attract penalties under these provisions are distinct and separate. However, as per the amended provisions of Section 78 (w.e.f. 10.5.2008), penalty under Section 76 is not permissible when penalty has been imposed under section 78. Therefore for the period w.e.f 10.5.2008, penalty under section 76 will not sustain. To this extent, we modify the imposition of penalties
Case-5- Shree Digvijay Cement Co Ltd vs Commissioner Of Service … on 9 August, 2016 (Custom, Excise & Service Tax Tribunal-Ahemdabad)-Levy of Penalty in section 76,77 and 78
Therefore, we uphold the penalties imposed under Section 76 of the Finance Act, 1994 on the appellant. Similarly, penalty under Section 77 is for non-compliance of the statutory provisions of filing of returns. Inasmuch as there is non-compliance, the same is also liable to be upheld. As regards the penalty under Section 78, we have already held that the appellant has suppressed facts and therefore, extended period of time has been rightly invoked. If that be so, penalty under Section 78 is imposable since it is mandatory. Apex Court decision in Rajasthan Spinning and Weaving Mills [2009 (238) E.L.T. 3 (S.C.)] refer. However, for the period w.e.f. 10-5-2008, only penalty under Section 78 is imposable and not that under Section 76 in view of the express provisions provided in that respect in the said Section 78. However, we observe that penalty under Section 78 is imposable equal to the unpaid quantum of service tax and any service tax paid and appropriated has to be excluded while determining the penalty under Section 78
7. In view of the above, we find that the contentions of the appellants are not maintained.
Case-6-Balhar Chand and others v. State of Punjab and others, 2008 Crl.L.J. 4783-Imposition of Penalty under FEMA 1999 and Income Tax Act, 1961 does not amount to double jeopardy as they operate under different statutes
“8. Mr. O.P. Nagpal, learned counsel for the petitioners has contended before me that once the penalty had been imposed by the Enforcement Directorate, the order of the Court to deposit the amount was in violation of Article 20 of the Constitution of India and Section 300 of the Criminal Procedure Code as it will amount to double jeopardy. Therefore, order passed by Enforcement FAO No. 4458 of 2007 [14] Directorate Annexure P-5 has attained finality and the criminal court and the Income Tax Authorities have got no jurisdiction.
9. I am unable to accept this contention raised by the counsel for the petitioners. Enforcement Directorate, Income Tax Authorities and criminal court adjudicate in their own sphere . Accused have admitted that the amount recovered was sent by their brothers who were residing abroad. Therefore, there was a violation of provisions of FEMA Act and under Enforcement: Directorate had to act and penalty imposed by him was a consequence to the act of the petitioners who had received cash amount from abroad through channels which were not permissible, but it does not absolve petitioners as the amount so received was to be declared before the Income Tax Authorities. Non-declaration of the amount will amount to evasion of tax and Income Tax Authorities are within their right to proceed under Income -tax Act in accordance with the provisions of law.”
Case-7- P.V. Mohammad Barmay Sons vs Director Of Enforcement on 20 August, 1992 Equivalent citations: 1993 AIR 1188, 1992 SCR (3) 960-Levy of Penalty under Customs Act 1962 and FEMA 1973
The further contention that under the Customs Act 1962 for the self same contravention, the penalty proceedings terminated in favour of the appellant, is of little avail to the appellant for the reason that the two Acts operate in different fields, one for Contravention of FERA and the second for evasion of customs duty. The mere fact that the penalty proceedings for evasion of the customs duty had ended in favour of the appellant, does not take away the jurisdiction of the enforcement authorities under the Act to impose the penalty in question. The doctrine of double Jeopardy has no application. The further contention that the offence is based on no evidence is devoid of any substance. Notice was given to the appellant. In the show-cause notice contravention was brought to its notice. The appellant gave the explanation. After consideration of the facts since there was no express permission granted by the Reserve Bank of India for the payments by the appellant to the agent outside India, the contravention was proved and penalty was imposed. It is the penalty under Sec. 5(1) (a) & (b) of the Repealed Act equivalent to Sec. 9(1)(a) of the Act. Therefore, the penalty imposed is based on material, valid reasons and proper findings.
Case-8-Maqbool Hussain vs The State Of Bombay.Jagjit … on 17 April, 1953 (SC) Equivalent citations: 1953 AIR 325, 1953 SCR 730- Theory of Double Jeopardy and Guarantee of fundamental right given in Art. 20 (2) circumscribed by providing that there should be not only a prosecution but also a punishment in the first instance in order to operate as a bar to a second prosecution and punishment for the same offence, thus applicable only on criminal proceedings
“7. The fundamental right which is guaranteed in Art. 20(2) enunciates the principle of “autrefois convict” or “double jeopardy”. The roots of that principle are to be found in the well established rule of the common law of England “that where a person has been convicted of an offence by a Court of competent jurisdiction the conviction is a bar to all further criminal proceedings for the same offence”. [Per Charles J. in Reg. v. Miles (1890) 24 Q. B.D. 423(A). To the same effect is the ancient maxim “Nimo Bis Debet Puniri Pro Uno Delicto”, that is to say that no one ought to be twice punished for one offence or as it is sometimes written “Pro Eadem Causa” that is for the same cause.
8. This is the principle on which the party pursued has available to him the plea of “autrefois convict” or “autrefois acquit”.
“The plea of `auterfois convict’ or `autrefois acquit’ avers that the defendant has been previously convicted or acquitted on a charge for the same offence as that in respect of which he is arraigned…. The question for the jury on the issue is whether the defendant has previously been in jeopardy in respect of the charge on which he is arraigned, for the rule of law is that a person must not be put in peril twice for the same offence. The test is whether the former offence and the offence now charged have the same ingredients in the sense that the facts constituting the one are sufficient to justify a conviction of the other, not that the facts relied on by the Crown are the same in the two trials. A plea of “autrefois acquit” is not proved unless it is shown that the verdict of acquittal of the previous charge necessarily involves an acquittal of the latter”. (Vide Halsbury’s Laws of England-Hailsham Edition- Vol. 9, Pages 152 and 153, Para 212.)
10. The Fifth Amendment of the American Constitution enunciated this principle in the manner following:
“….. nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled, in any criminal case, to be witness against himself….. Willis in his Constitutional Law, at page 528 observes that the phrase ” `jeopardy of life or limb’ indicates that the immunity is restricted to crimes of the highest grade and this is the way Blackstone states the rule. Yet, by a gradual process of liberal construction the Courts have extended the scope of the clause to make it applicable to all indictable offences, including misdemeanors”…… “Under the United States rule, to be put in jeopardy there must be a valid indictment or information duly presented to a Court of competent jurisdiction, there must be an arraignment and plea, and a lawful jury must be impaneled and sworn. It is not necessary to have a verdict. The protection is not against a second punishment but against the peril in which he is placed by the jeopardy mentioned”.
12. The words “before a Court of law or judicial tribunal” are not to be found in Art. 20(2). But if regard be had to the whole background indicated above it is clear that in order that the protection of Art. 20(2) be invoked by a citizen there must have been a prosecution and punishment in respect of the same offence before a Court of law or a tribunal, required by law to decide the matter in controversy judicially on evidence on oath which it must be authorised by law to administer and not before a tribunal which entertains a departmental or an administrative enquiry even though set up by a statute but not required to proceed on legal evidence given on oath. The very wording of Art. 20 and the words used therein….. “convicted”, “commission of act charged as an offence”, “be subjected to a penalty”, “commission of the offence”, “prosecuted and punished”, “accused of any offence”, would indicate that the proceedings therein contemplated are of the nature of criminal proceedings before a Court of law or a judicial tribunal and the prosecution in this context would mean an initiation or starting of proceedings of a criminal nature before a Court of law or a judicial tribunal in accordance with the procedure prescribed in the statute which creates the offence and regulates the procedure.
Case-9- State Of Punjab And Anr. vs Dalbir Singh And Ors. on 19 July, 2000 Equivalent citations: JT 2000 (10) SC 456, (2001) ILLJ 46 SC, (2001) 9 SCC 212
Civil Appeal Nos. 5386-5389/1997 and 5390/1997 are directed against the Division Bench Judgment of the Punjab and Haryana High Court, which took the view that initiation of a departmental proceedings for the alleged misconduct would tantamount to double jeopardy and prohibited under Article 20 of the Constitution, as for the same misconduct under the provisions of Motor Vehicles Act, certain fine has been levied. This judgment of the Division Bench of Punjab and Haryana High Court has later been reversed by the Full Bench of the same High Court against which concerned employee has moved this Court in C.A. No. 6071/1997. The question that arises for consideration, therefore, is whether the levy of penalty under the provisions of Motor Vehicles Act would absolve the concerned employee from all liabilities and would debar the disciplinary authority to initiate disciplinary proceedings. In other words, the question would be whether initiation of a departmental proceedings would tantamount to violation of provision contained in Article 20(2) of the Constitution. Having examined the relevant facts involved in these appeals and having examined the judgment of the Full Bench of Punjab and Haryana High Court, we have no hesitation to come to the conclusion that the Full Bench rightly interfered with the judgment of the Division Bench of Punjab and Haryana High Court. In our view, the payment of penalty under the provisions of Motor Vehicles Act would not absolve the employee fully from all other liabilities nor would it debar the employer from initiating a departmental proceedings for the alleged misconduct of the concerned delinquent employee. Such initiation of a departmental proceedings by no stretch of imagination, can be held to be a violation of provision of Article 20 of the Constitution of India. In this view of the matter, we uphold the Full Bench judgment of the Punjab and Haryana High Court, and necessarily therefore, the Civil Appeals filed by the State Government are allowed and the Civil Appeal filed by the delinquent is dismissed.
