Satyam Traders Vs State of U.P. And 2 Others (Allahabad High Court)
Summary: The Allahabad High Court considered a challenge by M/S Satyam Traders to a detention order dated 2 March 2025 under Section 129(1) of the Central Goods and Services Tax Act, 2017 and a penalty order dated 6 March 2025 under Section 129(3), read with Section 20 of the Integrated Goods and Services Tax Act, 2017. The authorities proceeded on two grounds: first, that the original invoice was not present with the goods and only a photocopy was available; and second, that the truck weighed 25,410 kilograms when it was weighed two days after detention, which was 270 kilograms more than the weight stated in the invoice.
The petitioner explained that the e-way bill had been properly generated and was available with the goods along with the photocopy of the invoice. In relation to the weight difference, the petitioner submitted that rain during the two days after detention could have increased the weight and, in any event, the difference was only approximately 1%. The respondents were unable to identify any specific ground establishing an intention to evade tax. The Court noted that a catena of judgments of the Court and other High Courts had held that penalty under Section 129(3) has to be based on an intention to evade tax. The petitioner relied upon the Supreme Court judgment in Assistant Commissioner (ST) and Others v. Satyam Shivam Papers Private Limited and Another, reported in (2022) 14 SCC 157, and the Allahabad High Court judgment in M/s Gobind Tabacco Manufacturing Co. & Another v. State of U.P. & 2 Others, reported in 2022 U.P.T.C. [Vol.111] – 1080.
