M.D. Traders Vs State of Uttar Pradesh And Another (Allahabad High Court)
Allahabad High Court quashed the GST penalty computed under Section 129(1)(b) and directed authorities to recompute it under Section 129(1)(a), as the goods were accompanied by a proper tax invoice. The case clarifies correct penalty application for e-way bill lapses.
The writ petition, M.D. Traders vs State of Uttar Pradesh And Another, was heard by the Allahabad High Court concerning an alleged infringement under the U.P. Goods and Services Tax Act, 2017. The petitioner, M.D. Traders, sought to quash the impugned notice (DRC-01/Form GST MOV-07 dated August 20, 2025) and the impugned order (GST Form GST MOV-09 dated August 26, 2025) issued by the Assistant Commissioner, State Tax Jurisdiction Sector-2 (Mobile Squad-2), Bareilly.
Key Submission and Allegation
The core submission by the petitioner’s counsel, Shri Pranjal Shukla, was that the goods were undeniably accompanied by a tax invoice clearly disclosing full particulars of the owner, who is a registered dealer. The alleged infringement was the e-way bill not accompanying the goods.
Legal Issue and Court’s Holding
The petitioner argued that for the sole reason of the e-way bill being absent, the penalty should have been computed only under Section 129(1)(a) of the Act. However, the Adjudicating Authority had erroneously computed the penalty in terms of Section 129(1)(b) of the Act. Reliance was placed on the similar case of Halder Enterprises vs State of U.P., where the authorities were directed to carry out the penalty exercise in terms of Section 129(1)(a) of the CGST Act.
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