Ganpati Battery Traders Vs State of U.P. (Allahabad High Court)
Seller cannot be penalised for mentioning the quantity of goods in pieces instead of weight
The Hon’ble Allahabad High Court in the matter of M/s. Ganpati Battery Traders v. State of U.P. [Writ Tax No. 1138 of 2021 dated December 6, 2022] has held that mere selling of batteries by piece instead by weight does not make the seller liable to be penalised under the Central Goods and Services Tax Act, 2017 (“the CGST Act”).
Facts:
M/s. Ganpati Battery Traders (“the Petitioner”) is involved in the business of sale and purchase of old batteries. The Petitioner sold large and small damaged batteries (“the Goods”) to M/s Shanti Prakash Power Private Limited in Gwalior through tax invoice, which was intercepted enroute by Mobile Squad, Unnao. The truck was detained for verification under Section 20 of the Integrated Goods and Service Tax Act, 2017 (“the IGST Act”) read with Section 68(3) of the CGST Act.
The Petitioner was served with a notice under Section 20 of the IGST Act read with Section 129(3) of the CGST Act, followed by the order imposing a penalty of INR 9,70,542/- by the Assistant Commissioner (“the Respondent”) on the basis that the goods were sold based on number of pieces and not by weight. Accordingly, the Petitioner deposited the entire penalty and the goods were released. Further, the Petitioner filed an appeal against the order of the Assistant Commissioner, which was rejected upholding the order of the Respondent.
Being aggrieved, this petition has been filed.
The Petitioner contended that it had purchased the goods by piece and further sold it by piece and that there was no concealment on its part as all the correct details were furnished by the Petitioner in the invoice differentiating the goods.
The Department contended that the Petitioner was trying to evade taxes by selling the goods by piece instead by weight. It was further contended that Rule 46 of the Central Goods and Service Tax Rules, 2017 (“the CGST Rules”) would be applicable in the case.
Issue:
Whether the Department was right in imposing penalty on the Petitioner?
Held:
The Hon’ble Allahabad High Court in Writ Tax No. 1138 of 2021 held as under:
