Case Law Details
Gupta Mentha Oil Commission Agent Vs State of Up And 2 Others (Allahabad High Court)
In Gupta Mentha Oil Commission Agent vs. State of UP and Others, the Allahabad High Court quashed penalty orders imposed on the petitioner under Section 129(3) of the Uttar Pradesh Goods and Services Tax (UP GST) Act, 2017. The dispute arose when tax authorities conducted a search at the petitioner’s premises, subsequently imposing a penalty on June 23, 2018, which was upheld in an appeal decision on May 7, 2019. The petitioner contested these actions, arguing that a search operation should not trigger penalty proceedings under Section 129, which primarily governs situations of goods in transit, rather than at a fixed business location.
The High Court cited a precedent set in Mahavir Polyplast Pvt. Ltd. vs. State of UP, which clearly established that search and seizure actions at a business premise do not justify penalty proceedings under Section 129 of the Act. Following this interpretation, the court deemed the penalties imposed on Gupta Mentha Oil unjustified. Consequently, the court annulled both the initial penalty order and the subsequent appellate decision, directing the State to refund any tax and penalty amounts collected within four weeks. The decision underscores the importance of adhering to procedural boundaries in tax enforcement under the UP GST Act.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Pranjal Shukla, 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 June 23, 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 May 7, 2019, 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 petitioner.
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 June 23, 2018 and May 7, 2019 are quashed and set aside.
6. 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.
7. The instant writ petition is allowed in aforesaid terms. Consequential reliefs to follow.
8. Any amount that has been deposited by the petitioner to be refunded within a period of four weeks from date.
Order Date :- 8.5.2024
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