Mr. X, an unregistered person under GST purchases the goods supplied by Mr. Y who is a registered person without receiving a tax invoice from Mr. Y and thus helps in tax evasion by Mr. Y. What disciplinary action may be taken by tax authorities to curb such type of cases and on whom?

Solution:

Both Mr. X and Mr. Y will be offender and will be liable to penalty as under: Mr. X – Penalty leviable under section 122(3) which may extend to ₹ 25,000/-;

Mr. Y – Penalty leviable under section 122(1), which will be higher of following, namely (i) ₹10,000/- or (ii) 100% of tax evaded.