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IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD
SHEKHAR B.SARAF, PRAVEEN KUMAR GIRI
S.S. Enterprises – Appellant
Versus
State of U.P. – Respondent
1. Heard learned counsel appearing on behalf of the parties.
2. This is a writ petition under Article 226 of the Constitution of India wherein the writ petitioner has made the following prayers:-
"A. Issue a Writ, Order or Direction in the nature of Certiorari quashing order dated 24.06.2025 passed by Respondent No.2 Assistant Commissioner Commercial Tax Mobile Unit Khatauli, Muzaffarnagar - u/s 129(3) of UP GST Act 2017. (Annexure No.1)."
B. Issue writ order or directing the nature of mandamus directing Assistant Commissioner Commercial Tax Mobile Mobile Unit Khataul, Muzaffarnagar to release goods and vehicle seized u/s 129(1)(a) of the act;"
3. Upon perusal of the impugned order, we find that penalty has been imposed under Section 129(1)(b) of the CGST Act treating the petitioner as not being the owner of the goods.
4. Learned counsel appearing on behalf of the petitioners relies upon a judgment of this Court in M/s Halder Enterprises v. State of U.P. and others reported in 2024 (2) ADJ 660 (DB), wherein this Court has examined this issue and also examined the relevant circular that has been issued by the department with regard to penalty to be imposed under Section 1
Penalties under GST cannot be imposed without summoning the petitioner, and lack of business activity does not negate ownership; statutory circular provisions should be adhered to in determining owne....
The court established that proper documentation allows the owner of goods to be treated under Section 129(1)(a) of the CGST Act for release, overriding penalties under (1)(b).
The court determined that compliance with documentation allows a transporter to be regarded as the owner of goods, affecting the imposition of penalties under the C.G.S.T. Act.
Intention to evade tax is a prerequisite for imposing penalties under GST Act; mere technical issues should not warrant such penalties.
The imposition of penalties under the GST Act for discrepancies in compliance is justified when evidence shows violations of declared loading points and intent to evade tax obligations.
Intent to evade tax is a necessary condition for proceedings under Sections 129 and 130 of the CGST Act; absence of such intent invalidates penalties imposed under these sections.
The imposition of penalties without adherence to principles of natural justice renders administrative orders unsustainable.
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