Section 125 Penalty of Rs. 25,000 Each Under CGST and SGST Is Wholly Unjustified — Allahabad HC Holds Maximum Penalty Is Rs. 25,000 Under the Section

The Allahabad High Court has set aside a penalty order where Rs. 25,000/- was imposed under CGST and Rs. 25,000/- under SGST — totalling Rs. 50,000/- — under Section 125 of the GST Act, holding that such dual imposition is de hors the provisions of the Section which provides for a maximum penalty of Rs. 25,000/-. Justice Pankaj Bhatia, in Writ Tax No. 594 of 2026 (Super Electrical vs. Addl. Commissioner, decided 16.04.2026), quashed both the penalty order dated 20.09.2024 and the appellate order dated 21.01.2026.

The petitioner had been imposed a penalty of Rs. 25,000/- under CGST and Rs. 25,000/- under SGST under Section 125 of the GST Act. The appeal against the penalty was dismissed as beyond limitation. The petitioner's neat contention before the High Court was that the imposition of Rs. 25,000/- both under CGST as well as under SGST is wholly unjustified as Section 125 provides for a maximum penalty of Rs. 25,000/-. The Court accepted this contention, set aside both the penalty order and the consequential appellate order, and remanded the matter for a fresh order considering the mandate of Section 125. This ruling provides clarity on the outer ceiling of general penalty that can be imposed under Section 125 across both enactments.

•  2026-juristway.com-1049-HC(Allahabad)-GST  |  High Court of Allahabad  |  Writ Tax No. 594 of 2026  |  16.04.2026