Proceedings rightly initiated u/s. 129(1)(b) of GST Act as transactions found to be bogus

Shree Maa Trading Company Vs State of U.P. (Allahabad High Court)

Allahabad High Court held that proceedings rightly initiated under section 129(1)(b) of the GST Act since on verification of GST portal it is found that transactions are not shown which concludes the transactions are bogus.

Facts- The petitioner submits the goods in question were in transit from Delhi to Raipur along with tax invoice and GR, but the same were intercepted at Jhansi (UP) on 26.05.2025; whereby, proceedings u/s. 129 of the UPGST/CGST/IGST Act were initiated and MOV – 01 was issued on 27.05.2025. On 01.06.2025, MOV – 04 was issued. MOV – 06 was issued on 01.06.2025 and GST DRC – 01 was issued on 03.06.2025. Once the goods were detained on 26.05.2025 and the show cause notice has been issued after a week, i.e., 7 days, the entire proceedings are vitiated.

The petitioner submits that due to inadvertent mistake of the truck driver, the document could not be produced at the time of detention as all the documents were accompanying the goods and therefore, the orders passed u/s. 129(1)(b) of the GST Act are bad and the same ought to have been passed u/s. 129(1)(a) of the GST Act as the petitioners being the owner of the goods. After passing of the penalty order, an application was moved under Rule 112 of the GST Rules, which ought to have been allowed.