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2024 (4) TMI 1080 - HC - GSTLevy of penalty - goods were undervalued - HELD THAT - This Court in the case of M/s Shambhu Saran Agarwal and Company v. Additional Commissioner Grade-2 and others 2024 (2) TMI 187 - ALLAHABAD HIGH COURT has categorically held imposition of penalty under Section 129 of the Act on the speculation that the goods are under valued cannot be allowed. In the above case this Court had referred to a judgment of Kerala High Court in Hindustan Coca Cola Private Limited v. Assistant State Tax Officer 2020 (3) TMI 1125 - KERALA HIGH COURT to hold that imposition of penalty under Section 129 of the Uttar Pradesh Goods and Service Tax Act 2017 (hereinafter referred to as the Act ) on the ground that the goods are under valued cannot be allowed. In such cases it is for the officer intercepting the goods to detain them for the purpose of preparing the relevant papers for effective transmission to the judicial assessing officers and nothing beyond the same. The impugned orders are quashed and set aside - petition allowed.
Issues:
The issues involved in the judgment are imposition of penalty under Section 129 of the Uttar Pradesh Goods and Service Tax Act, 2017 based on the ground of goods being undervalued. Judgment Summary: Issue 1: Imposition of Penalty for Undervaluation The petitioner filed a writ petition under Article 226 of the Constitution of India challenging the orders dated April 6, 2023, and May 16, 2023, passed by the Assistant Commissioner and Additional Commissioner, respectively, imposing penalty on the grounds of undervaluation of goods. The Court referred to a previous case where it was held that detention of goods solely on the basis of undervaluation without following the proper procedure is not valid. The Court emphasized that specific provisions under Sections 73 or 74 of the Act must be adhered to for detecting undervaluation before imposing penalties under Section 129. It was further stated that officers do not have the power to detain goods based on speculation of undervaluation and then impose penalties. The Court relied on a judgment of the Kerala High Court to support its decision. Consequently, the impugned orders were quashed and set aside, with directions for returning any deposits made by the petitioner to the authorities within four weeks. In conclusion, the writ petition was allowed, and consequential reliefs were ordered to be provided to the petitioner.
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