2024 (5) TMI 718 - HC - GST

Levy of penalty u/s 129(3) subsequent to the search and seizure action - HELD THAT - It has been categorically held by a coordinate Bench of this Court in Mahavir Polyplast Pvt. Ltd. Vs. State of U.P. and 2 others 2022 (8) TMI 410 - ALLAHABAD HIGH COURT and judgment of this Court in Poddar Trading Company vs. Commissioner, Commercial Tax, U.P. 2024 (3) TMI 785 - ALLAHABAD HIGH COURT that search and seizure of the godown cannot result in penalty proceedings under Section 129 of the Act. The present proceedings are not justified, and accordingly, the impugned orders dated June 18, 2018 and June 14, 2019 are quashed and set aside. Petition allowed.

Summary

Issues involved:
The judgment deals with penalty orders u/s 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 and orders passed in appeal u/s 107 of the Act subsequent to a search of the petitioner's business premises.

Penalty Proceedings u/s 129(3) of the Act:
The Court referred to previous judgments to establish that penalty proceedings under Section 129 of the Act cannot be initiated solely based on a search and seizure of premises. Citing cases Mahavir Polyplast Pvt. Ltd. Vs. State of U.P. and Poddar Trading Company vs. Commissioner, Commercial Tax, U.P., the Court held that the penalty in the present case was not justified. Consequently, the impugned orders dated June 18, 2018 and June 14, 2019 were quashed and set aside.

Refund of Tax and Penalty:
The Court directed the respondents to refund the tax and penalty amount deposited by the petitioner within four weeks from the date of the judgment.

Conclusion:
The instant writ petition was allowed, and the Court granted consequential reliefs to follow.