Summary: The Bombay High Court canceled penalties against employees of Shemaroo Entertainment Ltd. for alleged fake invoicing, citing issues with authority and incorrect application of the law.
On February 25, 2026, the Bombay High Court made a decision involving Amit Manilal Haria, Hiren Uday Gada, and Atul Hirji Maru, who work for Shemaroo Entertainment Ltd., against the Joint Commissioner of CGST and Central Excise. The court looked at penalties placed on Amit Manilal Haria, Hiren Uday Gada, and Atul Hirji Maru for alleged fake invoicing and wrongly claimed Input Tax Credit (ITC).
Amit Manilal Haria, Hiren Uday Gada, and Atul Hirji Maru were each hit with penalties of ₹133.60 crores on February 1, 2025, under Section 122(1A) of the CGST Act. This huge amount was based on accusations of using and passing on ITC they were not eligible for.
"I impose penalty amounting to Rs. 1,33,60,60,889/- on the petitioners," stated the order that was challenged.
Amit Manilal Haria, Hiren Uday Gada, and Atul Hirji Maru argued against the penalties, saying they were just employees and not the people responsible for paying taxes under the CGST Act. They also argued that the penalties were applied for a time before the law was even in effect on January 1, 2021.
The court, led by Justices G. S. Kulkarni and Aarti Sathe, found that the penalties were given without proper authority. The court mentioned a similar case, Shantanu Sanjay Hundekari vs. Union of India, where employees were not held personally responsible for company tax issues.
"The order against the petitioners is without proper authority and not valid in law," noted the judgment.
The court canceled the penalties, stating that employees cannot be punished for company tax issues unless they directly gained from the deals. This decision highlights the need to ensure the right authority when giving tax-related penalties.
