2018 (4) TMI 97 - HC - GST

Seizure of goods - penalty u/s 129 (3) of the U.P. G.S.T. Act, 2017 - it was alleged that the goods were not accompanied with proper documents - petitioner contends that all proper documents were furnished by it to the proper officer in response to the SCN - Held that - the petitioner is a registered dealer inside the State of U.P. and certain documents i.e. original tax invoices, goods receipts etc. are being claimed to have been issued to cover the transactions - Since the revenue disputes the existence of those documents, an enquiry may be required to be conducted in that regard - However prima facie the petitioner being a registered dealer inside the State of U.P., no useful purpose would be served in allowing the goods to continue under detention - goods to be released subject to fulfillment of conditions. Penalty - Held that - it appears that the penalty order was passed ex parte and there are some defects in the same - penalty order dated 28.10.2017 is therefore set aside and the matter is remitted to decide those proceedings afresh. Petition allowed - part matter on remand.

Summary

Issues:
Challenge to penalty order dated 28.10.2017 and seizure of goods without proper documents.

Analysis:
The petitioner challenged the penalty order dated 28.10.2017 and the seizure of goods while transporting from Kanpur to Delhi. The goods were detained without proper documents, although the petitioner claimed to have submitted all necessary documents in response to the show cause notice. The revenue disputed this claim, but the petitioner provided copies of the documents along with the writ petition. The penalty notice was issued under section 129(3) of the U.P. G.S.T. Act, 2017, imposing a penalty equal to 100% of the value of goods seized plus five percent tax. The petitioner disputed that the penalty order was served on them, and upon investigation, it was found that the penalty order was passed ex parte with some defects.

The High Court set aside the penalty order dated 28.10.2017 and remitted the matter for fresh proceedings. The petitioner was granted a week to file a final reply to the notice and charges mentioned in the penalty order. The proper officer was directed to pass a fresh reasoned order within one week after receiving the petitioner's reply. Regarding the seizure of goods, the petitioner, being a registered dealer in U.P., claimed to have issued original tax invoices and goods receipts. An inquiry was deemed necessary as the revenue disputed the existence of these documents. However, considering the petitioner's status as a registered dealer, it was decided that detaining the goods served no useful purpose.

The Court ordered the release of the goods and the vehicle upon the petitioner furnishing an adequate security in the form of an indemnity bond to the satisfaction of the proper officer for the value of the seized goods. It was noted that the tax for the transactions had already been paid by the petitioner in October 2017. The writ petition was disposed of with no costs incurred by either party.