Revenue Second Appeal Confined Solely to Fine Without Challenging Penalty Is Not Maintainable Before Tribunal

By | November 13, 2026
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Revenue Second Appeal Confined Solely to Fine Without Challenging Penalty Is Not Maintainable Before Tribunal

Issue

Whether a second appeal filed by the Revenue before the Appellate Tribunal under Section 112 read with Section 107 of the CGST/UPGST Act is maintainable when it challenges only the deletion of the fine while leaving the deletion of the accompanying penalty unchallenged.

Facts

  • The respondent-firm underwent a search operation conducted under Section 67 of the CGST/UPGST Act.
  • Following the search, the Proper Officer invoked Section 130(2) read with Section 122 to impose a penalty of approximately Rs. 0.95 lakh and a fine of approximately Rs. 0.50 lakh.
  • On first appeal, the Appellate Authority held that while proceedings under Section 73 or 74 could be initiated in a search case, the levy and collection of penalty and fine under Sections 130(2) and 122 were unsustainable.
  • Aggrieved by this order, the Revenue filed a second appeal before the Appellate Tribunal, restricting its challenge solely to the fine component without assailing the findings on penalty.

Decision

  • Omission to Challenge Penalty: The Tribunal noted that the department had challenged the first appellate findings exclusively regarding the fine and had left the findings setting aside the penalty completely unassailed.
  • Appeal Non-Maintainable: Because the substantive findings regarding the penalty were not contested, a piecemeal second appeal confined solely to the fine component could not be entertained in law.
  • Summary Dismissal: Consequently, the second appeal filed by the Revenue was held to be not maintainable and was dismissed summarily in favor of the assessee.

KeyTakeways

  • No Selective Challenge of Interlinked Levies: Where an appellate authority sets aside both penalty and confiscation fine on foundational grounds, the Revenue cannot selectively appeal only the fine while allowing the penalty deletion to attain finality.
  • Appropriate Procedure in Search Cases: Discrepancies uncovered during a search under Section 67 require adjudication through regular demand provisions (Sections 73/74) rather than summary confiscation and penalty under Sections 130(2) and 122.
  • Maintainability Threshold: Departmental appeals framed in a fragmented manner that fail to assail core adverse findings are liable to summary dismissal at the threshold.
GOODS AND SERVICE TAX APPELLATE TRIBUNAL , AGRA BENCH
Shailendra Kumar Singh
v.
Mansi Udhyog
Ajeet Singh, Judicial Member
and Vivek Kumar, Technical Member
APL/D129/AGR/2026
NOVEMBER  3, 2026
Mukesh Kumar, AR for the Appellant. Saket Bindal, Adv. for the Respondent.
ORDER
1. Case called out for hearing on admission.
2. Learned DR Sh. Mukesh Kumar, appeared before the bench on behalf of appellant/state.
3. Sh. Saket Bindal, Advocate, has appeared on behalf of respondent and took the notice.
4. Bothe the authorised representatives have been heard on admission.
5. Grounds of appeal and relevant documents annexed thereto are also perused.
6. Present second appeal u/s 112 of CGST/UPGST, Act, has been preferred assailing the impugned order passed by first appellate authority vide which amount of fine and penalty imposed by learned proper officer u/s 130(2) read with section 122 of CGST/UPGST, Act, vide which in a search case conducted u/s 67 of CGST/UPGST, Act, a penalty of Rs. 95,480/- and fine of Rs. 50,000/- total in 1,45,480/- was imposed on respondent firm. It was held by learned first appellate authority that in a search case though department can launch proceeding u/s 73/74 of CGST/UPGST, Act but levying or collecting penalty and fine by invoking powers conferred 130(2)/122 are not sustainable.
7. In this second appeal department has challenge the findings of learned first appellate authority confine to amount of fine only.
8. We are unable to understand that while department has not challenged the findings of first appellate authority in respect of amount of penalty. How, to the extent of fine appeal can be entertained by this tribunal.
9. Thus, this second appeal filed by revenue is not mentionable and accordingly dismissed summarily by virtue of section 112 of CGST/UPGST, Act.
10. Order be communicated to all concerned, as per law.