Offences by Companies under Section 137 of CGST Act, 2017

Here we give an explanation of the offences by the companies as per CGST Act, 2017 under Section 137:

Furthermore, explaining the meaning of company is relevant for the purposes of this section. A “Company” here means a body corporate, is inclusive of a Firm or other association formulated by individuals. Whereas, a “Director”, in regards to a Firm, will be equivalent to a Partner in a Firm.

Section 137 of CGST Act, 2017 – Compounding of offences:

1.  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 the 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.

2.  Notwithstanding 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 another officer of the company, such director, manager, secretary or another officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

3.  Where an offence under this Act has been committed by a taxable person being a partnership firm or a Limited Liability Partnership or a Hindu Undivided Family or a trust, the partner or Karta or managing trustee shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly and the provisions of sub-section (2) shall, mutatis mutandis, apply to such persons.

4.   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 the such offence.