High Court Rules on Improperly Levied Penalties on Goods in Transit Lacking Proper Documentation

Case Details: Margo Brush India v. State of U.P. - [2023] 152 taxmann.com 515 (Allahabad)

Judiciary and Counsel Details

• • Rajesh Bindal, CJ. & J.J. Munir, J.
  • Aaditya Pandey & Akhil Agnihotri, Advs. for the Petitioner.
  • Ankur Agarwal, Standing Counsel for the Respondent.

Facts of the Case

In the present case, the goods in transit were seized by the authorities on the ground that goods were not accompanied by proper documents. The driver of the vehicle was deemed to be the owner of goods and penalty of 100% of value of goods was levied. The petitioner filed writ petition and contended that penalty was wrongly levied since both consignors and consignees of goods detained in transit were present and accepting ownership of seized goods.

High Court Held

The Honorable High Court noted that the levy of penalty under Section 129(1)(b) could not be justified as Section 129(1)(a) provides that where owner of goods comes forward for payment of penalty, the amount has to be two hundred per cent of tax payable. However, in the present case, the penalty had been levied to tune of hundred per cent of value of goods. Therefore, the writ petition was allowed and the matter was remitted back to the competent authority for passing fresh order within a period of two weeks from the date of receipt of copy of the order.