Gupta Mentha Oil Commission Agent Vs State of U.P
Date: May 7, 2024
Subject Matter
Search and seizure actions at a fixed business location do not warrant penalties under Section 129
Summary
In the case of Gupta Mentha Oil Commission Agent vs. State of UP and Others, the Allahabad High Court reviewed a penalty imposed under Section 129(3) of the Uttar Pradesh Goods and Services Tax (UP GST) Act, 2017. The penalty stemmed from a search conducted at the petitioner’s business premises on June 23, 2018, with an appeal decision on this penalty issued on May 7, 2019. The petitioner challenged the imposition of the penalty, arguing that it was unjustified as Section 129 pertains to goods in transit, not to business locations. - The court referenced a precedent from Mahavir Polyplast Pvt. Ltd. vs. State of UP, previously establishing that search and seizure actions at a fixed business location do not warrant penalties under Section 129. Consequently, the court ruled that the penalties against Gupta Mentha Oil were unwarranted, quashing the penalty order and the appellate decision. The court ordered the state to refund any tax and penalty amounts collected from the petitioner within four weeks, underscoring the necessity for proper procedural adherence in tax enforcement under the UP GST Act. The writ petition filed by the petitioner was consequently allowed.
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.