M/S Diginx Trader v. State of U.P. and Another
Case note by CA Nikhil Gupta
Case overview
This Allahabad High Court decision concerns GST statutory provision - Section 129; GST statutory provision - Section 129(1). The retained release ledger records the outcome as Allowed / set aside and classifies the matter under Detention, Seizure & E-Way Bill.
Facts and procedural background
Neutral Citation No. - 2023:AHC:169037-DB
Case :- WRIT TAX No. - 1000 of 2023
Petitioner :- M/S Diginx Trader Respondent :- State of U.P. and Another Counsel for Petitioner :- Shubham Agrawal Counsel for Respondent :- C.S.C.
Hon'ble Pritinker Diwaker,Chief Justice Hon'ble Ashutosh Srivastava,J.
Issues before the Court
Petitioner :- M/S Diginx Trader Respondent :- State of U.P. and Another Counsel for Petitioner :- Shubham Agrawal Counsel for Respondent :- C.S.C.
Hon'ble Pritinker Diwaker,Chief Justice Hon'ble Ashutosh Srivastava,J.
1. Heard Sri Shubham Agarwal, learned counsel for the petitioner, Sri Ankur Agarwal, learned counsel representing the Respondent No.2 and learned Standing Counsel, who has accepted notice on behalf of the State Respondent No.1.
Court's analysis and findings
Hon'ble Pritinker Diwaker,Chief Justice Hon'ble Ashutosh Srivastava,J.
1. Heard Sri Shubham Agarwal, learned counsel for the petitioner, Sri Ankur Agarwal, learned counsel representing the Respondent No.2 and learned Standing Counsel, who has accepted notice on behalf of the State Respondent No.1.
2. The writ petition is aggrieved by the penalty order dated 5.8.223 passed by the Assistant Commissioner-Rampur, Respondent No.2 in Form MOV-09 under Section 129(1)(b) of the Goods and Services Tax Act, 2017 whereby and whereunder penalty of Rs.72,76,500/- has been levied upon the petitioner by not treating the petitioner to be the owner of goods. Admittedly, the goods were duly accompanied by the tax invoice, e-way bill and bilty issued in the name of the petitioner as the consignee and the goods were in transit through the State of U.P. during its movement from Patna to New Delhi and as such, there was no intention to evade tax. It is further contended that the petitioner is the owner of the goods and is ready and willing to deposit penalty under protest under Section 129(1) (a) to get the goods released considering the perishable nature of the goods and diminishing of its value substantially with the onset of monsoons. Strong reliance has been placed upon the decision of this Court in Writ (Tax) No.178 of 2023 (M/s Sahil Traders Vs. State of U.P.) decided on 25.05.2023 which applies squarely to the case at hand.
3. Sri Ankur Agarwal, learned counsel representing the revenue has vehemently opposed the writ petition by submitting that the petitioner has rightly been held not the owner of the goods and the penalty has rightly been imposed upon the petitioner under Section 129(1) (b). He, however, could not dispute the fact that intention to evade tax is a per-requisite for imposition of penalty under Section 129 of the Act. The E-way Bills being the documents of title to the goods were accompanying the goods hence, the conclusion of the revenue that the petitioner was not the owner of the goods is
Decision and relief
patently erroneous. Consequently, the penalty proceedings were liable to be initiated under Section 129(1)(a) and not 129(1)(b) as has been done in the present case.
4. In view of the above, expressing our full agreement with the view expressed by the Coordinate Bench of this Court in the case of M/s Sahil Traders (Supra) we set aside the impugned penalty order dated 5.8.2023 passed in Form MOV-09 under Section 129(1)(b) of the Goods and Services Tax Act, 2017. The writ petition is allowed. The Respondent No.2 is directed to pass fresh order treating the petitioner to be eligible to the benefit of Section 129(1)(a) of the Act.
5. Be that as it may, the writ petitioner shall be at liberty to avail any remedy available to it to assail the assessment order.
2023-08-23T17:14:08+0530 High Court of Judicature at Allahabad
Ratio and practical significance
The binding effect flows from the court's operative reasoning reproduced below, read in the context of the pleaded facts and statutory provisions. Users should not generalise the result beyond materially comparable facts.
- Map the operative reasoning to the exact GST provision and procedural stage.
- Confirm whether a later review, appeal, SLP or subsequent judgment affects reliance.
- Preserve the official case number, decision date and neutral citation in professional work.
Full judgment text
Neutral Citation No. - 2023:AHC:169037-DB
Case :- WRIT TAX No. - 1000 of 2023
Petitioner :- M/S Diginx Trader Respondent :- State of U.P. and Another Counsel for Petitioner :- Shubham Agrawal Counsel for Respondent :- C.S.C.
Hon'ble Pritinker Diwaker,Chief Justice Hon'ble Ashutosh Srivastava,J.
1. Heard Sri Shubham Agarwal, learned counsel for the petitioner, Sri Ankur Agarwal, learned counsel representing the Respondent No.2 and learned Standing Counsel, who has accepted notice on behalf of the State Respondent No.1.
2. The writ petition is aggrieved by the penalty order dated 5.8.223 passed by the Assistant Commissioner-Rampur, Respondent No.2 in Form MOV-09 under Section 129(1)(b) of the Goods and Services Tax Act, 2017 whereby and whereunder penalty of Rs.72,76,500/- has been levied upon the petitioner by not treating the petitioner to be the owner of goods. Admittedly, the goods were duly accompanied by the tax invoice, e-way bill and bilty issued in the name of the petitioner as the consignee and the goods were in transit through the State of U.P. during its movement from Patna to New Delhi and as such, there was no intention to evade tax. It is further contended that the petitioner is the owner of the goods and is ready and willing to deposit penalty under protest under Section 129(1) (a) to get the goods released considering the perishable nature of the goods and diminishing of its value substantially with the onset of monsoons. Strong reliance has been placed upon the decision of this Court in Writ (Tax) No.178 of 2023 (M/s Sahil Traders Vs. State of U.P.) decided on 25.05.2023 which applies squarely to the case at hand.
3. Sri Ankur Agarwal, learned counsel representing the revenue has vehemently opposed the writ petition by submitting that the petitioner has rightly been held not the owner of the goods and the penalty has rightly been imposed upon the petitioner under Section 129(1) (b). He, however, could not dispute the fact that intention to evade tax is a per-requisite for imposition of penalty under Section 129 of the Act. The E-way Bills being the documents of title to the goods were accompanying the goods hence, the conclusion of the revenue that the petitioner was not the owner of the goods is
patently erroneous. Consequently, the penalty proceedings were liable to be initiated under Section 129(1)(a) and not 129(1)(b) as has been done in the present case.
4. In view of the above, expressing our full agreement with the view expressed by the Coordinate Bench of this Court in the case of M/s Sahil Traders (Supra) we set aside the impugned penalty order dated 5.8.2023 passed in Form MOV-09 under Section 129(1)(b) of the Goods and Services Tax Act, 2017. The writ petition is allowed. The Respondent No.2 is directed to pass fresh order treating the petitioner to be eligible to the benefit of Section 129(1)(a) of the Act.
5. Be that as it may, the writ petitioner shall be at liberty to avail any remedy available to it to assail the assessment order.
2023-08-23T17:14:08+0530 High Court of Judicature at Allahabad
Finin2min Q&A
What court decided this case?
Allahabad High Court
What was the case number?
WRIT TAX No. 1000 of 2023
When was the decision delivered?
2023-08-22
Which GST provisions are identified in the case?
GST statutory provision - Section 129; GST statutory provision - Section 129(1)
What was the recorded outcome?
Allowed / set aside
Is the complete judgment text available here?
Yes. This page includes a faithful local rendition of the full text recovered from the issuing court source.
Should this page substitute professional advice?
No. Verify the official citation and later history before professional reliance.
Who authored the Finin2min case note?
CA Nikhil Gupta.