The penalty order issued in Form MOU-09 under Section 129(1)(b) of the Goods and Services Tax Act, 2017 was cancelled by the Allahabad High Court considering the commodities in transit were accompanied by the tax invoice, e-way bill, and bilty.
The bench of Justice Pritinker Diwaker and Justice Ashutosh Srivastava relied on the Allahabad High Court’s decision in the matter of M/s Sahil Traders vs. the State of U.P., which ruled that in the face of the petitioner’s GST invoice and e-way bill, the goods could not have been treated as untraceable to a registered dealer.
The petitioner has lodged a challenge against the penalty decision of the Assistant Commissioner, which was issued in Form MOU-09 under Section 129(1)(b) of the Goods and Services Tax Act of 2017. The penalty of Rs. 48,53,940 was imposed due to the petitioner not considering the petitioner as the owner of the goods.
The petitioner claimed that the goods were accompanied by a tax invoice, an e-way bill, and a bilty issued in the petitioner’s name as the consignor and that the goods were in transit through the state of Uttar Pradesh on their journey from Kolkata to New Delhi. There were no plans to evade taxes.
The petitioner stated that he was the owner of the goods and was ready and willing to pay a penalty under protest under Section 129(1)(a) to have the goods freed, given the perishable nature of the products and the significant decrease in their value with the arrival of the monsoons.
The government maintained that the petitioner was correctly deemed not to be the owner of the goods and that the penalty imposed under Section 129(1)(b) was appropriate.
The court overruled the penalty order and ordered the department to issue a new order deeming the petitioner qualified for the benefit of GST Act Section 129(1)(a).
| Applicant Name | M/S Bhawani Traders |
| Citation | Writ Tax no. – 854 of 2023 |
| Date | 24.07.2023 |
| Counsel for Petitioner | Shubham Agrawal |
| Counsel for Respondent | C.S.C. |
| Allahabad HC | Read Order |
