Tax and penalty can’t be demanded u/s 129 if taxpayer didn’t ask for provisional release of detained goods: HC

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Case Details: State of U.P. v. Maa Vindhyavasini Tobacco (P.) Ltd. – [2022] 145 taxmann.com 103 (Allahabad)

Judiciary and Counsel Details

Pankaj Bhatia, J.

Facts of the Case

The department intercepted vehicle of assessee and tax was demanded and penalty was imposed in respect of goods detained alleging transportation of same goods twice based on same invoice. However, the original order was set aside by appellate authority due to absence of materials required for such detention and seizure of goods. The department filed writ petition against the appellate order.

High Court Held

The Honorable High Court noted that as per section 129 of CGST Act, goods detained can be released if assessee/owner of goods pays penalty specified under section 129(3). If assessee does not want to pay penalty under section 129, department can impose penalty under section 122 and not under section 129(3). However, in the instant case, assessee had not approached department for provisional release of goods on payment of penalty under section 129 and thus, order demanding tax and penalty could not be passed under section 129(3). Moreover, the appellate authority also found that the basis for initiating proceedings were non-existent. Therefore, the writ petition was liable to be dismissed.

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