Allahabad HC bins Patanjali’s plea against Rs 273 crore GST penalty

PRAYAGRAJ: Allahabad high court has dismissed a petition by yoga practitioner Ramdev’s Patanjali Ayurved Ltd challenging a Rs 273.5-cr penalty imposed by GST authorities.In a recent order, a bench of Justices Shekhar B Saraf and Vipin Chandra Dixit rejected Patanjali’s argument that such penalties constituted criminal liability and could be imposed only after a criminal trial.

The court cited Section 122 of CGST Act, 2017, and held that such fines could be imposed through civil proceedings, without requiring criminal trials.The HC pointed out that GST penalty proceedings were civil in nature and could be adjudicated by proper officers and “were not required to undergo prosecution”.According to GST authorities, Patanjali came under investigation following information about suspicious transactions involving firms with high input tax credit (ITC) utilisation but no income tax credentials. The investigation led to allegations that Patanjali “indulged in circular trading of tax invoices only on paper without actual supply of goods”.Directorate General of Goods and Services Tax Intelligence (DGGI), (Ghaziabad circle) issued Patanjali a showcause in April 2024 proposing the penalty of Rs 273.51. The company then moved the HC.