Facts of the Case:

In this case, the petitioner challenged the detention and seizure proceedings initiated by the State GST authorities. The impugned proceedings arose out of an interception carried out by the Mobile Squad, Gautam Buddha Nagar, pursuant to which a notice in Form GST MOV-07 dated 20.11.2025 and a consequential order in Form GST MOV-09 dated 26.11.2025 were issued.

It was an admitted position that the goods were accompanied by a valid tax invoice, clearly disclosing complete particulars of the owner of the goods, who was a registered dealer under the GST law. However, the authorities alleged an infringement on the ground that the e-way bill was not accompanying the goods at the time of interception.

Despite the presence of a valid tax invoice and absence of any allegation of tax evasion, the Adjudicating Authority imposed penalty by invoking Section 129(1)(b) of the U.P. GST Act, 2017, which applies to cases where the owner of the goods does not come forward to pay tax and penalty. Aggrieved by the computation of penalty under an incorrect statutory provision, the petitioner challenged the orders before the High Court.

Issue:

Whether, in a case where goods are accompanied by a valid tax invoice disclosing the identity of a registered owner, the GST authorities can impose penalty under Section 129(1)(b) of the U.P. GST Act instead of Section 129(1)(a) merely on account of non-availability of an e-way bill.

Held that:

The Court held that where the goods are admittedly accompanied by a valid tax invoice containing full particulars of the registered owner, the case squarely falls under Section 129(1)(a) of the Act and not under Section 129(1)(b).

The Court relied upon its earlier decision in Halder Enterprises v. State of U.P., wherein it was categorically held that mere absence or defect in an e-way bill, without any dispute regarding the tax invoice or ownership of goods, cannot justify invocation of Section 129(1)(b). Section 129(1)(b) is attracted only in circumstances where the owner of the goods does not come forward, which was not the case here.

The Court observed that the adjudicating authority had erroneously computed the penalty under a harsher provision, despite there being no dispute as to the identity of the owner or the taxability of the goods. Since the factual matrix was undisputed and the legal position was already settled, the Court found no justification to keep the writ petition pending or to call for a counter affidavit.

Accordingly, the impugned order was quashed, and the authorities were directed to re-determine the penalty strictly in accordance with Section 129(1)(a) of the Act.

Case Name: M/s Mz Momin Products Versus State of Uttar Pradesh And Another dated 12.12.2025

To read the complete judgement 2025 Taxo.online 3381