Fateh Chand Bhagwan Das Vs Additional Commisionerr Grade-2 (Appeal) -2 Commerrcial Tax (Allahabad High Court)
In a significant ruling, the Allahabad High Court has quashed the penalty proceedings under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017, following a search and seizure operation at a business premise. The case, titled Fateh Chand Bhagwan Das Vs Additional Commissioner Grade-2 (Appeal) -2 Commercial Tax, highlights the legal limitations of penalty imposition under the GST framework.
Detailed Analysis
The writ petition in question arose from a penalty order dated June 18, 2018, under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017, and an appellate order dated June 14, 2019, under Section 107 of the same Act. The petitioner, represented by Sri Shubham Agrawal, contended that the penalty proceedings were initiated following a search of their business premises. The State-respondent was represented by Sri Rishi Kumar, Additional Chief Standing Counsel.
Key Judicial Precedents
The court referred to two pivotal judgments in similar cases:
- Mahavir Polyplast Pvt. Ltd. Vs. State of U.P. and 2 others reported in (2022 U.P.T.C. [VOL.112] – 1514): This case established that the search and seizure of a godown cannot justify penalty proceedings under Section 129 of the Act.
- Poddar Trading Company vs. Commissioner, Commercial Tax, U.P. reported in (2024) 17 Centax 48 (All.): This judgment reinforced the principle that penalty under Section 129 cannot be imposed merely based on search and seizure operations.
Court’s Findings
