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2024 Supreme(All) 1883
IN THE HIGH COURT OF ALLAHABAD
SAUMITRA DAYAL SINGH, PRASHANT KUMAR, JJ.
M/s Singh Traders and 2 Others - Petitioners
Versus
State of U.P. and Another - Respondents
WRIT TAX NO.459 OF 2024.
Decided On : 22-03-2024
Important Points
Subject
Taxation Law - Goods and Services Tax
Act Referred
Headnote
Facts of the case:
The petitioners, owners of goods, challenge the penalty order demanding 100% of the value of goods under the U.P. G.S.T. Act, claiming entitlement to lesser security against the tax amount.
Findings of Court:
The court finds the revenue authority's stance harsh and unreasonable, modifying the penalty to twice the tax amount as per the Act.
Issues: The main issue was the quantum of penalty imposed on the petitioners for goods in transit.
Ratio Decidendi: The court ruled that the penalty imposed was excessive and modified it to align with the provisions of the Act, emphasizing the petitioners' status as bona fide owners of the goods.
Result: The penalty order is modified and the writ petition stands disposed of.
For the Petitioners: Aditya Pandey
For the Respondent: C.S.C.
JUDGMENT
Heard Sri. Aditya Pandey, learned counsel for the petitioners 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 28.2.2024 and in Form GST DRC-08 dated 12.3.2024 (rectification order) 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 petitioners who describe themselves to be the owner of the goods. Therefore, they claim 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 v. State of U.P. and another), (Neutral Citation No.-2024:AHC:29885-DB), decided on 21.2.2024.
5. At present, the petitioners are 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 petitioners 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 petitioners, 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.
