Madhav Trader Vs State of U.P. and Another (Allahabad High Court)
Section 129(1)(b) penalty imposition contrary to CBIC clarification prescribing Section 129(1)(a) penalty warrants reconsideration
In Madhav Trader vs. State of U.P. & Another, the Allahabad High Court addressed the imposition of penalty under Section 129(1)(b) of the CGST Act, 2017. The petitioner challenged a penalty order dated September 21, 2024, issued in Form GST MOV-09. The petitioner argued that the penalty should have been levied under Section 129(1)(a), as clarified by the CBIC in a circular dated December 31, 2018. The petitioner cited previous rulings, including M/s Margo Brush India vs. State of U.P. and M/s Singh Traders vs. State of U.P., which supported this interpretation. The counsel for the respondents acknowledged that the case was covered by the CBIC clarification and the earlier judgments. The court set aside the penalty order, noting that it contradicted the prescribed guidelines. It remanded the matter back to the competent authority, directing it to issue a fresh order aligned with the CBIC’s clarification within two weeks of receiving the judgment. This ruling reinforces the need for authorities to adhere to established clarifications when determining penalties under GST law.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
