2025 (4) TMI 1234 - HC - GST

Maintainability of appeal - appropriate form - non-constitution of appellate tribunal - Levy of penalty u/s 129(1)(a) of the Uttar Pradesh Goods and Services Tax Act 2017 - HELD THAT - The appeal of the petitioner has been rejected by the Additional Commissioner State Tax Agra by the impugned order dated 29.11.2024. The appeal against the order passed by the aforesaid appellate authority lies under Section 112 of the UPGST Act 2017 before the appellate tribunal. The appellate tribunal has not been constituted till date. Section 112 of the UPGST Act 2017 contemplates pre-deposit only in respect of the tax amount in dispute. Since no tax amount is disputed but only penalty is in issue no further amount is required to be deposited by the petitioner under Section 112 of the GST Act 2017 - Matter needs consideration. In view of the fact that no tribunal has been constituted the impugned order of penalty shall remain stayed. The goods which have been seized shall be released subject to the petitioner complying with the requirements of Rule 140 of CGST Rules 2017. The amount of penalty deposited by the petitioner at the time of institution of the first appeal shall be adjusted while determining the amount of security in the form of bank guarantee and the bonds to be executed by the petitioner under Rule 140 of the CGST Rules 2017. The modification application is allowed.

Summary

The Allahabad High Court, through Hon'ble Ajay Bhanot, J., addressed a Civil Miscellaneous Modification Application concerning a penalty imposed under Section 129(1)(a) of the Uttar Pradesh Goods and Services Tax Act, 2017 ("UP GST Act"). The petitioner was penalized Rs. 21,29,889/- by the assessing authority under Section 129(3). An appeal was filed under Section 107(6) with a 25% pre-deposit of the penalty as per proviso 2 of that section. The Additional Commissioner rejected the appeal, and further appeal lies under Section 112 before the appellate tribunal, which remains unconstituted.Crucially, Section 112 requires pre-deposit only for disputed tax amounts, not penalties. Since only the penalty is disputed, no additional pre-deposit is mandated. Consequently, the Court ordered a stay on the impugned penalty order and directed the release of seized goods, subject to compliance with Rule 140 of the CGST Rules, 2017. The penalty amount already deposited shall be adjusted against security requirements under Rule 140. The modification application was thus allowed.