2018 (4) TMI 1856 - HC - GST

Levy of penalty under Section 129(3) of the UPGST Act, 2017 - seizure and detention of goods - HELD THAT - On deposit of tax imposed by the respondent- Mobile Squad Unit, the goods were released. However, the penalty proceeding continued and the penalty order has been passed and the authority has directed to deposit a sum of ₹ 8,14,260/- equivalent to the tax. This penalty order dated 7th February, 2018 has been challenged by means of an appeal before the Additional Commissioner, under Section 107 of the Act. The appeal has been dismissed. Till date, the tribunal has not been constituted, hence the petitioner has no way but to challenge the impugned penalty order by means of present writ petition. Learned Special Counsel appearing for the State and learned counsel appearing for the respondent nos.1 and 6 may file counter affidavit within a month. Rejoinder affidavit, if any, may be filed within ten days thereafter - List immediately after expiry of the aforesaid period.

Summary

Issues: Challenge to penalty proceedings under Section 129(3) of the UPGST Act, 2017.

In the judgment delivered by the Allahabad High Court, the petitioner challenged penalty proceedings initiated under Section 129(3) of the UPGST Act, 2017. The petitioner contended that goods were detained and seized, leading to the initiation of penalty proceedings and subsequent imposition of a penalty equivalent to the tax amount. Despite the release of goods upon tax deposit, the penalty proceedings continued, resulting in a penalty order dated 7th February, 2018, which was appealed before the Additional Commissioner under Section 107 of the Act. The appeal was dismissed, and due to the non-constitution of the tribunal, the petitioner resorted to challenging the penalty order through a writ petition.

The Court acknowledged the prima facie substance in the arguments presented by the petitioner, warranting further consideration. Consequently, the Court directed the learned Special Counsel for the State and the counsel for the respondents to file a counter affidavit within a month, allowing for a rejoinder affidavit within ten days thereafter. The Court scheduled the case for listing immediately after the specified period. Additionally, the Court issued a stay order, preventing the realization of the penalty amount from the petitioner until further orders were issued.