Case Law Details
Bishnu Supply Co Vs State of U.P. and Another (Allahabad High Court)
The writ petition was filed under Article 226 of the Constitution of India challenging the detention of the petitioner’s goods and vehicle and the subsequent orders passed under Section 129 of the Central Goods and Services Tax Act, 2017 read with Section 20 of the Integrated Goods and Services Tax Act, 2017.
At the outset, the petitioner restricted its challenge to the proceedings initiated under Section 129 of the CGST Act. The principal issue before the Court was whether the goods were liable to be released under Section 129(1)(a) or Section 129(1)(b) of the CGST Act read with the IGST Act.
The petitioner contended that it was the owner of the goods and, therefore, the goods should have been released in terms of Section 129(1)(a). However, the authorities had calculated the liability and proceeded under Section 129(1)(b) through an order dated September 12, 2024.
In support of its case, the petitioner relied upon the decisions of the Allahabad High Court in M/s Halder Enterprises v. State of U.P. and others and S/S S.K. Trading Co. and Another v. Additional Commissioner Grade 2 (Appeal) and Another. It was argued that enhancement of valuation could not be undertaken under Section 129(1)(a) and that the penalty under that provision must be determined on the basis of the valuation reflected in the invoice and e-way bill.
The respondent authorities defended the action taken and submitted that the proceedings were in accordance with law.
After examining the record and the judgments cited, the Court found no reason to take a view different from the earlier decisions. It held that the goods were required to be released in terms of Section 129(1)(a) of the CGST Act read with the IGST Act.
Accordingly, the order dated September 12, 2024 was quashed and set aside. The respondent authorities were directed to undertake the exercise under Section 129(1)(a) within three weeks on the basis of the valuation specified in the invoice. The Court left the petitioner free to pursue the remaining reliefs before the appropriate forum. The writ petition was allowed.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. The present writ petition, filed under Article 226 of the Constitution of India, assails the actions of the respondent authorities with regard to detention of the goods and vehicle of the petitioner as well as subsequent orders passed under Section 129 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the “CGST Act”) read with Section 20 of Integrated Goods and Services Tax Act, 2017.
2. At the outset, counsel appearing on behalf of the petitioner has restricted the prayers made in the writ petition to the proceeding initiated under Section 129 of the CGST Act.
3. The main issue in this writ petition is whether the goods may be released by the authorities under Section 129(1)(a) or 129(1)(b) of the CGST Act read with IGST Act.
4. The main contention of the learned counsel for the petitioner is that the petitioner is the owner of the goods and, therefore, goods are to be released as per Section 129(1)(a) of CGST Act read with IGST Act while the authorities have made the calculation under Section 129(1)(b) of the CGST Act read with IGST Act by an order dated September 12, 2024.
5. Counsel appearing on behalf of the petitioner has submitted that the present case is squarely covered by the judgment of this Court in M/s Halder Enterprises v. State of U.P. and others reported in 2024 (2) ADJ 660 (DB). He has further relied on a judgement of this Court passed in Writ Tax No.1464 of 2022 [S/S S.K. Trading Co And Another vs. Additional Commissioner Grade 2 (Appeal) And Another, decided on March 16, 2024 (Neutral Citation No. – 2023:AHC:66095)], wherein the Court has held that the enhancement of valuation cannot be done under Section 129(1)(a) of the Act and the penalty to be levied under Section 129(1)(a) of the Act would have to be on the basis of invoice/e-way bill.
6. Counsel for the respondent authorities has supported the actions of the authorities and stated that the actions taken by the authorities were correct in law.
7. On a bare perusal of the record and the judgments cited above, we see no reason why this Court should take a different view of the matter. Ergo, the goods would have to be released in terms of Section 129(1)(a) of the CGST Act read with IGST Act.
8. Accordingly, the order passed by the authorities dated September 12, 2024 is quashed and set aside. The respondent authorities are directed to carry out the exercise in terms of Section 129(1)(a) of the CGST Act read with IGST Act within a period of three weeks from today on the basis of valuation as specified in the invoice.
9. As the petitioner has not pressed for the other prayers in the writ petition, the same may be pursued by it before the appropriate forum.
10. the aforesaid direction, the writ petition is allowed.
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