HC Rules Penalty Under Section 129(3) Requires Goods Evaluation

Case Details: Aaria Enterprises vs. State of Bihar - [2025] 177 taxmann.com 845 (Patna)

Judiciary and Counsel Details

• P. B. Bajanthri & Shailendra Singh, JJ.
• D.V. Pathy, Sr Adv., Sadashiv Tiwari, Hiresh Karan, Ms Shivani Dewalla, Roshan Jha & Riddhiman Mukherjee, Advs. for the Appellant

Facts of the Case

The petitioner challenged an order passed under section 129(3) of CGST Act specifying penalty payable for release of goods and conveyance. It was contended that the officer who had invoked section 129(3) had no power to evaluate the value of goods and therefore the proceedings undertaken were without jurisdiction. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that under sub-section (3) of section 129 of CGST Act the Proper Officer has been entrusted with power of specifying penalty payable and it could be undertaken only after evaluation of goods read with corroborative material evidence like invoice, e-way bill and other material evidence. The Court observed that the petitioner could not apprise the Court of the meaning of the phrase “specifying penalty payable” under section 129(3) or indicate the circumstances under which the authority was required to specify penalty payable without assessing goods and its valuation. It was therefore held that the contention that the officer invoking section 129(3) had no jurisdiction was not tenable. The Court further noted that the petitioner had not co-operated in the proceedings initiated under section 129 and directed the petitioner to invoke the remedy of appeal before the appellate authority.