Ram India Company Vs State of U.P. and Another
Date: September 29, 2024
Court: High Court
Bench: Allahabad
Type: Writ Petition
Subject Matter
When ownership of goods is established, taxpayer is entitled to lesser penalty u/s 129(1)(a)
Summary
In the case at hand, the petitioner, represented by learned counsel, filed a writ petition seeking relief to quash a penalty order (GST MOV-09) dated August 14, 2024, issued under the provisions of the CGST/IGST Act and related rules. The main contention was against the quantum of penalty ordered at a higher rate (100 percent of the value of goods) under Section 129(1)(b) of the U.P. GST Act, 2017. The petitioner argued that as the owner of the goods, he should be liable only for a lesser penalty under Section 129(1)(a), which stipulates a penalty equal to twice the amount of tax on the goods. The court considered the arguments from both the petitioner and the state-representative, noting that the petitioner was not disputing the penalty per se, just its amount. Acknowledging that the revenue authority's stance was "harsh and unreasonable," the court agreed to modify the penalty imposed. Hence, the penalty was reduced to align with Section 129(1)(a), equivalent to twice the tax amount on the value of goods, based on the revenue's valuation. Consequently, the writ petition was disposed of with this modification, acknowledging the petitioner as the bona fide owner of the goods.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Aditya Pandey, learned counsel for the petitioner 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 14.08.2024 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 petitioner who describes himself to be the owner of the goods. Therefore, he claims 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 Vs. State of U.P. and another), (Neutral Citation No.-2024:AHC:29885-DB), decided on 21.2.2024.
5. At present, the petitioner is 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 petitioner 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 petitioner, 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.