Offences by Companies, LLP, Firm or HUF (Happy GST Series-19) by CA Rajender Arora
Section 137 of the CGST Act, 2017 governs the provisions for Offences by companies
1. What is the relevance of Section 137 of CGST Act, 2017?
By virtue of Section 137 of CGST Act, 2017, the persons responsible for the offences committed
by specified taxable persons as mentioned in the section, shall be liable to be proceeded
against and punished accordingly.
2. Who is responsible for acts done by a company?
As per Sub Section 1 of Section 137 of CGST Act, 2017,
Where an offence committed by a person under this Act is a company,
every person who, at the time the offence was committed was in charge of, and was
responsible to, the company for the conduct of business of the company, as well as the
company,
shall be deemed to be guilty of the offence and shall be liable to be proceeded against
and punished accordingly.
It is to be noted that "company" means a body corporate and includes a firm or other
association of individuals;
3. When would director, manager, secretary or other officer shall also be deemed to be guilty
of the offence committed by a company?
As per Sub Section 2 of Section 137 of CGST Act, 2017,
Not with standing anything contained in sub-section (1),
where an offence under this Act has been committed by a company and
it is proved that the offence has been committed with the consent or connivance of, or is
attributable to any negligence on the part of, any director, manager, secretary or other
officer of the company,
such director, manager, secretary or other officer shall also be deemed to be guilty of
that offence and
shall be liable to be proceeded against and punished accordingly.
4. Who is held liable in case of partnership firm or a Limited Liability Partnership or a Hindu
undivided family or a trust?
As per Sub Section 3 of Section 137 of CGST Act, 2017:-
5. What are the exceptions to this section?
As per Sub Section 4 of Section 137 of CGST Act, 2017, Nothing contained in this section shall
render any such person liable to any punishment provided in this Act, if he proves that the
offence was committed without his knowledge or that he had exercised all due diligence to
prevent the commission of such offence.
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