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Case Law Details

Case Name : Gopi Chand Batra Traders Vs State of U.P. And 2 Others (Allahabad High Court)
Appeal Number : Writ Tax No. 1632 of 2018
Date of Judgement/Order : 23/02/2024
Related Assessment Year :

Gopi Chand Batra Traders Vs State of U.P. And 2 Others (Allahabad High Court)

In the case of Gopi Chand Batra Traders vs. State of U.P. And 2 Others, the Allahabad High Court delivered a significant judgment regarding penalty imposition under Section 129 of the Uttar Pradesh Goods and Services Tax (GST) Act. This article provides a comprehensive analysis of the court’s decision and its implications.

The writ petition stemmed from a penalty order issued under Section 129(3) of the Uttar Pradesh GST Act, 2017, following a search and seizure conducted at the business premises. However, citing a precedent set by a coordinate bench in Mahavir Polyplast Pvt. Ltd. vs. State of U.P. and 2 Others, the court unequivocally stated that penalty proceedings under Section 129 cannot ensue from a godown search and seizure.

The court’s ruling elucidates the legal principle that penal consequences cannot arise solely from a search and seizure action at a godown, aligning with established judicial precedents. Consequently, the impugned penalty orders dated March 21, 2018, and August 31, 2018, were deemed unjustified and set aside by the court.

Furthermore, the Allahabad High Court directed the respondents to refund the tax and penalty amount deposited by the petitioner within four weeks from the date of the judgment, ensuring appropriate relief to the aggrieved party.

The judgment rendered by the Allahabad High Court in the case of Gopi Chand Batra Traders vs. State of U.P. And 2 Others serves as a significant precedent clarifying the scope of penalty imposition under Section 129 of the GST Act concerning search and seizure actions at godowns. By quashing the impugned penalty orders and directing refund of deposited amounts, the court upholds the principles of fairness and legality in tax enforcement. This decision underscores the importance of adherence to legal principles and judicial precedents in matters of tax administration, providing clarity and protection to taxpayers’ rights.

FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT

1. Heard Sri Shubham Agrawal, learned counsel appearing on behalf of the petitioner and Sri Ravi Shankar Pandey, learned Additional Chief Standing Counsel appearing for the State-respondent.

2. Instant writ petition arises out of penalty order dated March 21, 2018 passed under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as the ‘Act’) and the order passed in appeal dated August 31, 2018, under Section 107 of the Act.

3. In the present case, the proceedings under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as the ‘Act’) have been initiated subsequent to search of the business premises of the

4. It has been categorically held by the coordinate Bench of this Court in Mahavir Polyplast Pvt. Ltd. Vs. State of U.P. and 2 others reported in (2022 U.P.T.C. [VOL.112] – 1514) that search and seizure of the godown cannot result in penalty proceedings under Section 129 of the Act.

5. In light of the above, present proceedings are not justified, and accordingly, the impugned orders dated March 21, 2018 and August 31, 2018 are quashed and set aside.

7. This Court directs the respondents to refund the amount of tax and penalty deposited by the petitioner within a period of four weeks from date.

8. The instant writ petition is allowed in aforesaid terms. Consequential reliefs to follow.

9. Any amount that has been deposited by the petitioner to be refunded within a period of four weeks from date.

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