In a recent legal proceeding, the petitioner, represented by Sri Shubham Agarwal, sought relief against a penalty order issued on 08.09.2023 by the Assistant Commissioner Ghaziabad (Respondent No.2) under Section 129(1)(b) of the Goods and Services Tax Act, 2017. The penalty amounted to Rs. 37,59,792 and was imposed on the petitioner for allegedly not being recognized as the owner of goods in transit from Delhi to Haldwani, passing through Uttar Pradesh.
The petitioner argued that despite having proper documentation such as tax invoices, e-way bills, and bilty issued in their name as the consignor, the penalty was unjustified. They emphasized that there was no intention to evade tax and highlighted the perishable nature of the goods, which would substantially lose value due to the onset of monsoons. The petitioner expressed readiness to deposit the penalty under protest to secure the release of the goods. Reference was made to a previous court decision (Writ (Tax) No.178 of 2023: M/s Sahil Traders Vs. State of U.P.), which supported their case.
On the other hand, Sri Ankur Agarwal, representing the revenue, countered the petitioner’s arguments, asserting that the penalty was rightfully imposed as the petitioner was deemed not to be the owner of the goods. However, he acknowledged that the intention to evade tax is a prerequisite for such penalties. He argued that since the e-way bills, serving as documents of title to the goods, were with the goods, the conclusion drawn by the revenue was erroneous. Consequently, he suggested that penalty proceedings should have been initiated under Section 129(1)(a) instead of 129(1)(b).
The court, concurring with the decision in the case of M/s Sahil Traders, set aside the penalty order issued under Section 129(1)(b) and directed Respondent No.2 to reconsider the petitioner’s eligibility under Section 129(1)(a). This decision favored the petitioner’s stance, emphasizing the importance of proper documentation and the absence of intent to evade tax.
Furthermore, the court granted the petitioner the liberty to pursue any available remedy to challenge the penalty order, ensuring their rights to due process.
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