Cheminova India Limited Vs State of U.P. And 2 Others (Allahabad High Court)
Allahabad High Court heard a writ petition filed by Cheminova India Limited against an order requiring payment of ₹92,28,444 under Section 129(3) of the GST Act, 2017. The petitioner challenged the validity of the order, arguing that the authority lacked jurisdiction based on a 2018 circular issued by the Commissioner of Commercial Tax, Uttar Pradesh. It was contended that under various judicial precedents, authorities under Section 129 could not assess alleged undervaluation of goods. Additionally, the petitioner had offered to provide a bank guarantee for the release of seized goods, which was not accepted. The respondents, however, maintained that the order was based on discrepancies in e-way bill values rather than an independent valuation, asserting that the petitioner had an alternative appellate remedy.
After considering the arguments, the Court ruled that factual issues raised by the petitioner should be addressed by the Appellate Authority under Section 107. It directed that the seized goods be released upon submission of a bond and bank guarantee as per Section 129(1)(c) read with Rule 140 of the GST Rules. Furthermore, the Court provided temporary protection by ordering that if the petitioner’s appeal was dismissed, the bank guarantee would not be invoked for two weeks, allowing time for further legal recourse. The petition was accordingly disposed of with these directions.
