M/S LAKHDATAR TRADERS
VERSUS
STATE OF UP AND 2 OTHERS
WRIT TAX NO. – 1852 OF 2024
DATED: 11.11.2024
Facts: The Petitioner challenged the proceedings initiated under Section 129 of the CGST Act vide notice issued in Form GST MOV-07 dated October 08, 2024 and consequential penalty imposed vide demand order in Form GST MOV-09 dated October 16, 2024. The vehicle transporting goods from Patna to Gurugram, was intercepted on October 04, 2024 at Mathura, wherein, the driver’s statement was recorded in Form GST MOV-01, and a physical inspection was done, wherein, no discrepancies were found. However, the goods were detained on the allegation that the vehicle was not accompanied by the requisite documents, and subsequently, a notice in Form GST MOV-07 was issued indicating that the Petitioner’s GST registration was suspended. The petitioner contested the notice, arguing that the demand of ₹14,81,490 under Section 129(1)(b) was based solely on the suspension of registration and was unjustified as all requisite documents were present at the time of interception and the documents in question were dated October 01, 2024, whereas, GST registration has been suspended on October 03, 2024.
Issue: Whether the suspension of the Petitioner’s GST registration could justify the imposition of penalty under Section 129(1)(b) of the CGST Act despite the goods being accompanied by proper tax invoices and E-way bill?
Held that: Noted that, the Petitioner’s registration was suspended by Bihar authorities on October 03, 2024, but the intercepted goods were accompanied by valid tax invoices and E-way bills dated October 01, 2024, based on which, the penalty has been imposed under provisions of Section 129(1)(b) of the Act.
Referred, Halder Enterprises v. State of U.P. and other judgments where the court held that goods accompanied by proper documentation should be released under Section 129(1)(a). The action based solely on the suspension of registration was deemed unjustified.
Directed the authorities to comply with Section 129(1)(a) and release the goods within two weeks.
Quashed the penalty order dated October 16, 2024 and allowed the writ petition.
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