Fateh Chand Bhagwan Das Vs Additional Commisioner Grade-2 (Appeal) -2 Commerrcial Tax
Date: May 8, 2024
Subject Matter
Search and seizure of the godown cannot result in penalty proceedings under Section 129 of the Act
Summary
The case law titled Fateh Chand Bhagwan Das Vs Additional Commissioner Grade-2 (Appeal) -2 Commercial Tax, involves penalty proceedings under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017, following a search and seizure operation at a business premise. The Allahabad High Court quashed the penalty proceedings, citing legal limitations of penalty imposition under the GST framework. The court's decision was based on the fact that penalty proceedings cannot be justified solely based on the search and seizure of business premises. The court directed the respondents to refund the amount of tax and penalty deposited by the petitioner.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Shubham Agrawal, learned counsel appearing on behalf of the petitioner and Sri Rishi Kumar, learned Additional Chief Standing Counsel appearing for the State-respondent.
2. Instant writ petition arises out of penalty order dated June 18, 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 June 14, 2019, under Section 107 of the Act.
3. In the present case, the proceedings under Section 129(3) of the Act have been initiated subsequent to search of the business premises of the petitioner.
4. It has been categorically held by a 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) and judgment of this Court in Poddar Trading Company vs. Commissioner, Commercial Tax, U.P. reported in (2024) 17 Centax 48 (All.) 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 18, 2018 and June 14, 2019 are quashed and set aside.
7. 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.
8. The instant writ petition is allowed in aforesaid terms. Consequential reliefs to follow.