Mr. Cummins, an unregistered person under GST, purchases the goods supplied by Mr. Marsh who is a registered person without receiving a tax invoice…

(b) The levy of penalty is subject to a certain disciplinary regime which is based on jurisprudence, principles of natural justice and principles governing international trade and agreements. Such general discipline is enshrined in section 126 of the CGST Act, 2017. Accordingly- no penalty is to be imposed without affording an opportunity of being heard to the person proceeded against to rebut the allegations levelled against him,the penalty is to depend on the totality of the facts and circumstances of the case, the penalty imposed is to be commensurate with the degree and severity of breach of the provisions of the law or the rules alleged,the nature of the breach is to be specified clearly in the order imposing the penalty,the provisions of the law under which the penalty has been imposed is to be specified. Since the order suffers from lack of clarity about nature of breach which has taken place and about applicable law under which penalty has been imposed, such order passed by the department should be challenged.