Madhav Trader Vs State of U.P
Date: October 21, 2024
Court: High Court
Bench: Allahabad
Type: Writ Petition
Subject Matter
Penalty imposed u/s 129(1)(b) is NOT applicable where owner of the goods comes forward and accepts the ownership of the seized goods
Summary
The case involves a writ petition filed by the petitioner challenging a penalty order issued on September 21, 2024, under the provisions of the CGST/IGST Act. The petitioner contended that the penalty should have been levied under Section 129(1)(a) as clarified by the Central Board of Indirect Taxes and Customs (CBIC) in a circular dated December 31, 2018, rather than the higher penalty under Section 129(1)(b) that was initially imposed. The petitioner referenced earlier judgments that supported this view and the counsel for the respondent acknowledged that the clarification and previous rulings were applicable to the case at hand. Ultimately, the court found the penalty order issued was contrary to the CBIC’s clarification, set aside the penalty, and remanded the matter back to the competent authority to issue a fresh penalty order in line with the established guidelines within two weeks of receiving the judgment.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. This writ petition has been filed by the petitioner aggrieved of the impugned demand of penalty order passed in form GST MOV-09 dated 21.09.2024 passed by respondent No. 2 under the provisions of CGST/IGST Act and Rules.
2. Submissions have been made that penalty has been imposed under Section 129(1)(b) of the Act whereas in terms of the clarification dated 31.12.2018 issued by the Central Board of Taxes and Customs GST Policy Wing, the penalty in the present case could have been levied under Section 129(1)(a) of the Act to which, the petitioner is not disputing. Reliance has been placed on M/s Margo Brush India and others Vs. State of U.P. and another: Writ Tax No. 1580 of 2022 decided on 16.01.2023 and M/s Singh Traders and 2 others Vs. State of U.P. & Another: Writ Tax No. 459 of 2024 decided on 22.03.2024.
3. Counsel for the respondents does not dispute the fact that the issue, as raised, is covered by the clarification dated 31.12.2018 as well as the judgment in the case of M/s Margo Brush India (supra).
4. In view of above fact situation, the impugned demand of penalty order dated 21.09.2024, Annexure-1, passed by respondent No. 2 is set aside. The writ petition is allowed. The matter is remanded back to the competent authority to pass a fresh order in terms of the observations made hereinbefore within a period of two weeks from the date of receipt of copy of this order.