Penalty imposed merely for not selling old batteries on weight basis is not sustainable: HC

Case Details: Ganpati Battery Traders v. State of U.P. - [2023] 146 taxmann.com 49 (Allahabad)

Judiciary and Counsel Details

• • Rohit Ranjan Agarwal, J.
  • Anil Prakash Mathur for the Petitioner.
  • C.S.C. for the Respondent.

Facts of the Case

The petitioner is engaged in the business of buying and selling old batteries. They were transporting a truckload of these batteries for sale when it was intercepted by the Department’s Mobile Squad in Unnao. The truck was detained for verification under Section 20 of the IGST, 2017 in conjunction with Section 68(3) of the CGST, 2017. The driver of the truck was given a notice and the petitioner submitted a reply.

The Assistant Commissioner (Mobile Squad) then issued an order imposing a penalty on the petitioner, claiming that the goods were sold based on the number of pieces rather than by weight. The petitioner paid the full penalty and the truck and goods were released. They appealed this decision to the Appellate Authority, but the appeal was rejected.

The petitioner then filed a writ petition with the High Court of Allahabad, arguing that they had only purchased the batteries by the piece and had sold them on a per-piece basis, not by weight. They also stated that there had been no concealment on their part as they had provided a correct description of the goods in the truck invoice, which distinguished between large and small damaged batteries.

High Court Held

The Allahabad High Court observed that the petitioner had provided complete description in the tax invoice and consignment note about the transportation of damaged batteries, both large and small. The High Court set aside the orders issued by the Assistant Commissioner and the Appellate Authority, stating that the Department had wrongly detained the petitioner’s truck and goods and imposed a penalty.