Order u/s 129 of CGST Act determining tax liability is bad in law and liable to be quashed: HC
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Case Details: Bharti Airtel Ltd. v. State of U.P. - [2022] 143 taxmann.com 394 (Allahabad)
Judiciary and Counsel Details
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- Pankaj Bhatia, J.
- Manju Lata Mishra & Ashish Mishra for the Petitioner.
- C.S.C. for the Respondent.
Facts of the Case
The goods of petitioner were detained on the ground that Part-B of the e-way bill was not generated prior to the commencement of the transport of goods. The SCN was issued on this ground and imposed tax and penalty under section 129 of CGST Act, 2017. It filed appeal but the same was dismissed. Thereafter, it filed writ petition and contended that order passed u/s 129 of CGST Act determining tax liability & penalty was bad in law.
High Court Held
The Honorable High Court observed that Section 129 can be invoked by the department with regard to the goods in transit and the goods can be released only in the event the owner of the goods comes forward for payment of penalty as specified in section 129(1) of CGST Act. However, in case the owner of the goods or the person does not volunteer to pay the penalty as prescribed under section 129(1) then the department is will equipped to initiate proceedings by taking recourse to sections 73, 74, 75 of CGST Act read with section 122 for determination of tax and the penalty.
In the present case, the department proceeded to determine the tax liability as well as penalty only under the provisions of Section 129 of the Act, which is not contemplated or intended. Therefore, it was held that the entire action of determining the tax and penalty under section 129(1) was not legally substitutable and liable to be set aside.
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Observation of the Court are not as per the Act.Goods in movement/ transit and contravention as per section 68(3) and E way bill Riles 138 will surely attract penalty proceedings under section 129. On reply by the goods owner, the proper officer may decrease the penalty under section 122 or 125 where intention was not to evade the tax. PART-B need to be filled before the movement of the goods.