Ownership of Goods Established: Petitioner Entitled to Lesser Section 129(1)(a) Penalty

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.