Case Law Details
Ram India Company Vs State of U.P. and Another (Allahabad High Court)
In the case of Ram India Company vs. State of U.P. and Another, the Allahabad High Court addressed a dispute concerning the quantum of penalty levied under Section 129(1)(b) of the U.P. GST Act, 2017. The petitioner challenged the demand of a 100% penalty on the value of goods in GST MOV-09, asserting that as the owner of the goods, they were entitled to the lesser penalty of twice the tax amount under Section 129(1)(a). This writ petition sought to quash the penalty order and reduce the penalty amount.
The petitioner did not contest the imposition of the penalty itself but opposed the quantum imposed. The Court observed that while the goods were detained during transit, any delay in representation to the detaining authority did not cause prejudice to the revenue. The revenue authority’s strict stance was deemed harsh and unreasonable, especially since the petitioner was acknowledged as the bona fide owner of the goods.
In light of these considerations, the Court modified the penalty order by reducing the quantum to twice the tax amount as per Section 129(1)(a). This adjustment balances the petitioner’s claim and the revenue authority’s concerns without compromising the legitimacy of the tax collection process. The petition was disposed of with these directions, allowing the petitioner to comply with the reduced penalty while safeguarding procedural fairness.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Aditya Pandey, learned counsel for the petitioner and Sri Ankur Agarwal, learned Standing Counsel for the State-respondents.
2. The present petition has been filed praying for the following relief:
“(i) Issue a suitable writ, order or direction in the nature of certiorari for quashing the impugned demand of penalty order passed in from GST MOV-09 dated 14.08.2024 passed by the respondent no.2 under the provisions of the CGST/IGST Act and Rules (Annexure-1 to the writ petition).”
3. Limited challenge has raised to the demand of penalty at the higher rate being 100 percent of the value of the goods under Section 129(1)(b) of the U.P. G.S.T. Act, 2017 (hereinafter referred to the as, ‘the Act’) from the petitioner who describes himself to be the owner of the goods. Therefore, he claims to be entitled to release of the goods against payment of lesser security being twice the amount of the tax under Section 129(1)(a) of the Act.
4. At the outset, learned counsel for the parties have referred to the earlier order passed by this Court in Writ-Tax No. 16 of 2024 (M/s. Green India Vs. State of U.P. and another), (Neutral Citation No.-2024:AHC:29885-DB), decided on 21.2.2024.
5. At present, the petitioner is opposed to quantum of penalty and not at the stage of detention of goods.
6. We find the stand taken by the revenue authority is harsh and unreasonable.
7. Since, the goods were inspected in transit, some time may have lost to the petitioner in making the appropriate representation to the detaining authority.
8. In any case, no prejudice may be caused to the revenue authority, if it were considered the claim of the petitioner, at this stage subject to outcome of the appeal filed by against the penalty order.
9. Learned counsel for the petitioner states, the petitioner does not dispute the levy of penalty. Only, the quantum is in dispute.
10. In such circumstances, on query made, learned counsel for the revenue has made a fair statement, it cannot be doubted, the petitioner is the bonafide owner of the goods.
11. Accordingly, the penalty order is modified to the extent penalty imposed. Quantum is reduced in terms of provisions of Section 129(1)(a) of the Act i.e. equal to twice the amount of tax imposed on the value of the goods, as estimated by the revenue authorities.
12. With the aforesaid observations and directions, the writ petition stands disposed of.
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