Case Law Details
Green India Vs State of U.P. and Another (Allahabad High Court)
In the case of Green India Vs State of U.P. and Another, the petitioner, a registered person and owner of the goods, approached the Allahabad High Court seeking the release of goods seized by the Uttar Pradesh Goods and Services Tax (UPGST) authorities. The petitioner claimed that the goods were intercepted while being transported through Uttar Pradesh, and a penalty had been imposed based on the argument that the petitioner, as the consignee, had prepared the delivery challan for the goods. The revenue authorities contended that the penalty was valid because of the petitioner’s role in the delivery process.
The Court reviewed the relevant provisions of the UPGST Act, 2017, particularly Section 129(1)(a), which governs the release of goods in cases like these. The law allows the release of goods upon the payment of tax or providing security equal to 200% of the tax imposed on the goods. The Court noted that the goods could be released without prejudice to the petitioner’s right to contest the penalty, and no other party had claimed ownership of the goods. The petitioner was permitted to release the goods by providing the required security, while retaining the right to challenge the penalty order. The judgment referred to previous decisions on similar matters, emphasizing the proper application of Section 129, which governs the penalty and release of goods in cases of tax evasion or procedural violations.
The petitioner’s right to appeal against the penalty order was preserved, and the Court allowed the release of the goods against the security deposit. This judgment aligns with earlier decisions that clarified the scope of penalty under the UPGST Act.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. At the outset, Shri Shubham Agrawal, learned counsel for the petitioner states, the petitioner is willing to obtain release of the goods without prejudice of his rights to contest the penalty proceedings.
2. In that regard, it has been submitted, undisputedly, the petitioner is a registered person and the owner of the goods. Therefore, in any case, goods are liable to be released in his favour in terms of the provision of Section 129(1)(a) of the U.P.G.S.T. Act 2017. To that, there can be no dispute.
3. Having heard learned counsel for the parties and from perusal of record, it transpires that the petitioner is the consignee of the goods. The transaction disclosed to the revenue authorities was one of job work return to the petitioner (a registered dealer in the State of Haryana) from a dealer in Daurala. The goods were intercepted during movement through the State of Uttar Pradesh. Show cause notice was issued to the petitioner in its capacity as the consignee. Penalty order has also been passed against the petitioner in its capacity as the consignee. The case of the revenue is that the petitioner has also prepared delivery challan of job worker and therefore, the penalty has been rightly imposed. At the same time, upon query made, learned counsel for the revenue fairly states, no person other than the petitioner has claimed the goods.
4. Undoubtedly, under Section 129 of UPGST Act, 2017, different rates of penalties are prescribed depending upon the status of the person viz-a-viz, the goods that may have been seized. Again, undoubtedly the owner of the goods may not be visited with penalty exceeding 200 percent of the tax leviable on the offending goods.
5. The circular issued by the Commissioner dated 31.12.2018 is also to the same effect. The provisions of law and the circular have been considered in earlier decisions of the Court in H/S Halder Enterprises Vs. State of U.P. and others, Writ Tax No.1297 of 2023 (Neutral Citation No.2023:AHC:227182-DB), decided on 11.12.2023.
6. No other issue is involved in the present writ petition.
7. Learned counsel for the petitioner last submits that the goods may be made over to the petitioner subject to its complying Section 129 (1)(a) of UPGST Act, 2017 with liberty to appeal against the penalty order.
8. In view of the discussion made above, the writ petition succeeds and is allowed at this stage itself to the extent, petitioner is permitted to obtain release of goods against furnishing security equal to 200 percent of the tax imposable on the goods. It is otherwise left open to the petitioner to file appropriate appeal against the penalty order dated 30.12.2023.
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