GST Jamku AIOffences by companies.
Section 137(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 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.
Section 137(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 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.
In certain cases, when a person commits an offence under this Act, and the said person is a company, the responsibility extends beyond just the company itself.
Section 137(1)
If the offence is committed by a company, every person who was in charge of and responsible for the business conduct of the company at the time of the offence will also be considered guilty. This person, along with the company, can be taken to task and penalized accordingly.
Section 137(2)
Even if someone wasn't directly in charge but can be proven to have consented, connived, or been negligent in the commission of the offence, they, too, will be held accountable. This includes directors, managers, secretaries, or any other officer associated with the company. They will be treated as guilty of the offence and can face legal actions and penalties.
Consequences for Individuals
Individuals associated with a company, if found responsible for the offence, will face consequences as outlined in the respective sections. It ensures that those who are part of the decision-making or oversight of a company are held responsible for any wrongdoing.
Section 137(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.
In the realm of taxation laws, specific provisions exist to address offenses committed by entities falling under various categories. One such provision is detailed in Section 137(3) of the Act.
Liability of Partners and Trustees
When a taxable person commits an offense under the Act and belongs to a partnership firm, Limited Liability Partnership (LLP), Hindu undivided family (HUF), or a trust, certain individuals associated with these entities bear responsibility. The partner in a partnership firm, the karta in a Hindu undivided family, or the managing trustee in a trust is considered to be guilty of the offense. Consequently, these individuals can be subject to legal proceedings and subsequent punishment as dictated by the law.
Application of Sub-section (2)
Moreover, the provisions outlined in sub-section (2) are applicable mutatis mutandis to these individuals. This implies that certain adjustments or modifications are made as necessary, ensuring a fair and consistent application of legal principles. In essence, this ensures that those associated with the entity facing allegations are treated fairly and in accordance with the law.
By establishing clear guidelines for the liability of partners and trustees in cases of offenses committed by their associated entities, Section 137(3) serves to maintain accountability and uphold legal standards within the framework of taxation laws.
Section 137(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 such offence.
Explanation.—For the purposes of this section,—
*(i) "company" means a body corporate and includes a firm or other association of individuals; and
*(ii) "director", in relation to a firm, means a partner in the firm.
Offenses Committed by Companies
In the realm of legal consequences for companies, Section 137(4) plays a crucial role.
Exemption Clause
When it comes to this section, it's important to note that it doesn't automatically make someone subject to the punishments outlined in this Act. There's a safeguard in place—if a person can prove that they had no knowledge of the offense or that they took all necessary precautions to prevent it, they won't be held liable.
Explaining the Terms
To understand this section better, we need to define a couple of key terms:
*(i) Company: This term refers to a body corporate and extends to include a firm or any other association of individuals.
*(ii) Director: In the context of a firm, a director is essentially a partner in that firm.
Navigating the Legal Landscape
Understanding the intricacies of Section 137(4) is crucial for individuals associated with companies. This section acts as a shield, offering protection if one can demonstrate innocence or due diligence in preventing an offense.