Vehicle owner can’t avoid liability for goods seized in transit; must pay penalty under GST Act for vehicle release.

Case Name:

Ashwini Jain Vs. State Of U.P. And 3 Others

Court No. 7

Case : Writ Tax No. 1321 of 2019

Key Takeaways:

- Vehicle owners cannot avoid liability for penalties related to seized goods by claiming non-involvement with the goods.

- Section 129 of the GST Act covers seizure and release of both goods and conveyances (vehicles) in transit.

- Owners must pay the penalty under Section 129(3) to get their vehicles released, even if not involved with the goods.

- The court rejected segregating the liabilities for the goods and vehicle in this context.

Issue:

Whether the petitioner, as the registered owner of the vehicle, can avoid paying the amount imposed under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017, for the release of his vehicle seized while transporting goods he claims no involvement with.

Facts:

The petitioner approached the court seeking the release of his vehicle detained on 8th November 2019 by the Assistant Commissioner (Mobile Squad)-3, Kanpur. A penalty was imposed under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017, for the release of both the goods and the vehicle. The petitioner argued that being merely the registered owner, he had nothing to do with the goods contained in the vehicle and should not be liable to pay the amount.

Arguments:

Petitioner’s Arguments:

As a mere registered owner uninvolved with the goods, the petitioner claimed he should not be liable to pay the penalty under Section 129(3) for the vehicle’s release.

Revenue’s Arguments:

The heading of Section 129 “Detention, seizure and release of goods and conveyances in transit” is wide enough to cover seizure of vehicles along with goods. Therefore, the petitioner cannot avoid liability for the vehicle’s release.

Key Legal Precedents:

The court did not cite any specific previous cases as legal precedents. However, it relied on the language of Section 129 of the Uttar Pradesh Goods and Services Tax Act, 2017, particularly its heading, to arrive at the decision.

Judgement:

The court dismissed the writ petition, holding that the petitioner could not “wriggle out of his liability to pay the amount as imposed in terms of section 129 of the Uttar Pradesh Goods and Services Tax Act, 2017, for the purpose of release of his vehicle.” The court stated that the petitioner could not segregate liabilities for the goods and vehicle, nor avoid the prescribed procedure for the vehicle’s release. However, the dismissal did not prevent the petitioner from availing statutory appellate remedies.

FAQs:

Q1. Can a vehicle owner avoid penalties related to seized goods by claiming non-involvement?

A1. No, according to this judgment, the vehicle owner cannot avoid liability for penalties under Section 129 of the GST Act by claiming non-involvement with the seized goods.

Q2. What is the significance of the heading of Section 129 in this case?

A2. The court relied heavily on the heading “Detention, seizure and release of goods and conveyances in transit” to conclude that Section 129 covers seizure and release of both goods and vehicles, preventing segregation of liabilities.

Q3. Can the petitioner appeal this decision?

A3. Yes, the court clarified that the dismissal of the writ petition does not prevent the petitioner from availing statutory appellate remedies available under the law.

Q4. What legal principle did the court establish in this case?

A4. The court established that vehicle owners cannot have the benefit of segregated liabilities for goods and vehicles seized together under Section 129 of the GST Act. They must follow the prescribed procedure and pay the penalty for the vehicle’s release, regardless of their involvement with the goods.

Having heard the learned advocates for the parties and upon perusing the instant writ petition, it appears that the writ petitioner has approached this Court essentially seeking release of his vehicle which has been detained by the Assistant Commissioner (Mobile Squad)-3, Kanpur, on 8th November, 2019.

The pleadings in the writ petition reveals that a penalty has been imposed for the purpose of release of the goods as well as the vehicle in terms of section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017.

According to the learned advocate for the writ petitioner, his client is merely a registered owner of the vehicle and has nothing to do with the goods which were contained in the vehicle. As such, he is not liable to pay the amount in terms of section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017.

For the purpose of deciding the matter, we need to merely look at the heading of the provision contained under Section 129, which reads as follows:

“[129]. Detention, seizure and release of goods and conveyances in transit.”

The above heading is wide and clear enough to encompass within its fold this vehicle which has been seized along with the goods and as such, the writ petitioner cannot wriggle out of his liability to pay the amount as imposed in terms of section 129 of the Uttar Pradesh Goods and Services Tax Act, 2017, for the purpose of release of his vehicle. He cannot have the benefit of a segregated liability in the present context and the procedure prescribed for release of vehicle under the Uttar Pradesh Goods and Services Tax Act, 2017, cannot be avoided by the petitioner.

The writ petition stands dismissed in terms of the observations made here in above.

Dismissal of the writ petition, however, shall not stand in the way of the writ petitioner for the purpose of availing any statutory appellate remedy available in accordance with law.

Order Date :- 06.12.2019

Deepak/Dhananjai

(Biswanath Somadder,J.)

(Ajay Bhanot,J.)