Case Law Details
Singh Traders And 2 Others Vs State of U.P. and Another (Allahabad High Court)
The petitioners, who claimed to be the owners of goods detained by the authorities, contested the penalty levied at a higher rate of 100% of the goods’ value under Section 129(1)(b) of the Act. They sought the release of the goods against a reduced security amount, equal to twice the tax value, as provided under Section 129(1)(a) of the Act.
The court observed that while the petitioners did not dispute the levy of penalty, the quantum of the penalty was in question. The revenue authorities initially imposed a penalty at the higher rate, which the petitioners found unreasonable and harsh. The court, in light of the fact that the petitioners were the bonafide owners of the goods and no prejudice would be caused to the revenue by modifying the penalty, ruled in favor of the petitioners. The penalty was reduced to the amount stipulated under Section 129(1)(a), i.e., twice the tax amount imposed on the goods. The writ petition was disposed of with this modification, and the matter was concluded with a fair resolution.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Aditya Pandey, learned counsel for the petitioners and Sri Ankur Agarwal, learned Standing Counsel for the State-respondents.
2. The present petition has been filed praying for the following relief:
“(i) Issue a suitable writ, order or direction in the nature of certiorari for quashing the impugned demand of penalty order passed in from GST MOV-09 dated 28.2.2024 and in Form GST DRC-08 dated 12.3.2024 (rectification order) passed by the respondent no.2 under the provisions of the CGST/IGST Act and Rules (Annexure-1 to the writ petition).”
3. Limited challenge has raised to the demand of penalty at the higher rate being 100 percent of the value of the goods under Section 129(1)(b) of the U.P. G.S.T. Act, 2017 (hereinafter referred to the as, ‘the Act’) from the petitioners who describe themselves to be the owner of the goods. Therefore, they claim to be entitled to release of the goods against payment of lesser security being twice the amount of the tax under Section 129(1)(a) of the Act.
4. At the outset, learned counsel for the parties have referred to the earlier order passed by this Court in Writ-Tax No. 16 of 2024 (M/s. Green India Vs. State of U.P. and another), (Neutral Citation No.-2024:AHC:29885-DB), decided on 21.2.2024.
5. At present, the petitioners are opposed to quantum of penalty and not at the stage of detention of goods.
6. We find the stand taken by the revenue authority is harsh and unreasonable.
7. Since, the goods were inspected in transit, some time may have lost to the petitioners in making the appropriate representation to the detaining authority.
8. In any case, no prejudice may be caused to the revenue authority, if it were considered the claim of the petitioners, at this stage subject to outcome of the appeal filed by against the penalty order.
9. Learned counsel for the petitioner states, the petitioner does not dispute the levy of penalty. Only, the quantum is in dispute.
10. In such circumstances, on query made, learned counsel for the revenue has made a fair statement, it cannot be doubted, the petitioner is the bonafide owner of the goods.
11. Accordingly, the penalty order is modified to the extent penalty imposed. Quantum is reduced in terms of provisions of Section 129(1)(a) of the Act i.e. equal to twice the amount of tax imposed on the value of the goods, as estimated by the revenue authorities.
12. With the aforesaid observations and directions, the writ petition stands disposed of.
Order Date :- 22.3.2024
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