Penalty U/S 122(1A) GST Act Can Be Imposed Retrospectively Even If SCN Was Issued After Its Enactment: Delhi High Court

The Delhi High Court has clarified that penalty under Section 122(1A) of the GST Act can be imposed retrospectively if the Show Cause Notice (SCN) was issued after its enactment. Section 122(1A), introduced in 2021, penalizes those who retain benefits from wrongfully availed Input Tax Credit (ITC) or facilitate such transactions. The court noted that if the SCN was issued after the provision came into force, the penalty can apply even to transactions that occurred before the section's enactment, particularly in cases involving fraudulent ITC claims where the recipient was aware of fake firms.