Goverdhan Oil Mill Vs Additional Commissioner And Another (Allahabad High Court)
The Allahabad High Court has nullified a penalty imposed on Goverdhan Oil Mill under Section 129(3) of the Uttar Pradesh Goods and Services Act, 2017 (UPGST Act). The court’s decision, delivered on February 8, 2024, by respondent No.1 and June 28, 2023, by respondent No.2, centered on a discrepancy in the Harmonized System of Nomenclature (HSN) code in a tax invoice related to a stock transfer.
Goverdhan Oil Mill, the petitioner, argued that the case involved a stock transfer, a fact not disputed by the tax authorities. Consequently, the mill contended there was no intention to evade tax, a prerequisite for imposing penalties under the said section. The petitioner cited two previous judgments from coordinate benches of the same court to support its stance: M/s Vacmet India Ltd. v. Additional Commissioner Grade-2 (Appeals) and another (Writ Tax No.687 of 2019, decided on October 17, 2023) and M/s Anchor Health and Beauty Care Pvt. Ltd., Kanpur v. State of U.P. and others (Writ Tax No.78 of 2022, decided on February 6, 2024). Both precedents, according to the petitioner, established that penalties under Section 129(3) cannot be levied in cases of stock transfer.
