Proceedings to be initiated u/s 73/74 if owner of goods didn’t come forward to pay penalty u/s 129: HC

Case Details: Bharti Airtel Ltd. v. State of U.P - [2022] 145 taxmann.com 326 (Allahabad)

Judiciary and Counsel Details

• • Pankaj Bhatia, J.
  • Manju Lata Mishra & Ashish Mishra for the Petitioner.
  • C.S.C. for the Respondent.

Facts of the Case

The goods and vehicle were detained by the department and show cause notice was issued under section 129(3). However, the goods and vehicles were released on furnishing bank guarantee. It submitted reply to the notice and department issued order imposing tax liability and penalty. It contended that department didn’t serve copy of order and it was unable to file appeal. Therefore, the writ petition was filed challenging the validity of order under Section 129.

High Court Held

The Honorable high Court noted that in the present case Tax liability had been determined and penalty imposed under Section 129 of CGST Act. However, there is no power to determine the penalty payable under Section 129 as it can be done only in terms of the mandate of Section 122 of the CGST Act. The Court also noted that the department is empowered to initiate proceedings under Section 73 or Section 74 of CGST Act read with Section 122 if owner of goods does not come forward to pay penalty under Section 129. Thus, it was held that the impugned orders were not sustainable and amount paid for release of goods was directed to be refunded to petitioner.