Assessee argues penalty for release of seized goods can only be imposed under Section 122, not Section 129(3) of the UP GST Act.

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Case Name:

Krishna Group Vs. State Of U.P. And 2 Others (High Court of Allahabad)

Writ Tax No. 206 of 2020

Date: 18th February 2020

Key Takeaways:

- The court will examine whether the penalty for the release of seized goods can be imposed under Section 129(3) of the UP GST Act or only under Section 122.

- The case raises the question of whether the GST Act overrides or repeals the provisions of the Indian Penal Code (IPC) and the Code of Criminal Procedure (CrPC).

- The court’s decision will clarify the scope and applicability of Sections 122 and 129(3) of the UP GST Act in cases involving the seizure and release of goods.

Issue:

Can the penalty for the release of goods seized under Section 129 of the Uttar Pradesh Goods and Services Tax Act, 2017, be imposed under Section 129(3) of the Act, or can it only be imposed under Section 122 of the Act?

Facts:

Upon interception, the petitioner’s goods were seized under Section 129 of the UP GST Act on 15.09.2018. The petitioner approached the High Court to get the goods released, and on 09.10.2018, the court directed the release upon depositing 50% of the demanded amount. The proceedings culminated in an order dated 25.09.2018, passed under Section 129(3) of the UP GST Act. The petitioner filed an appeal against this order, which was dismissed on 25.11.2019 on the ground of delay. The petitioner then filed the present writ petition.

Arguments:

Petitioner’s Argument:

The learned counsel for the petitioner contended that the order dated 25.09.2019 could not have been passed under Section 129(3) of the UP GST Act. The penalty could have been imposed only under Section 122 of the Act.

State’s Argument:

The learned Standing Counsel opposed the petition, submitting that the FIR clearly alleged the creation of bogus firms and fabrication of false invoices, which constitute cognizable offenses under the Indian Penal Code (IPC).

Key Legal Precedents:

The court cited its own decision in Govind Enterprises vs. State of U.P. and others (Criminal Misc. Writ Petition No. 7303 of 2019), which held that the GST Act does not impliedly or explicitly repeal the provisions of the IPC or the Code of Criminal Procedure (CrPC), and an FIR can be registered for offenses punishable under the IPC, even if the same conduct is also punishable under the GST Act.

Judgement:

The court did not pass a final judgment in this case. Instead, it directed the learned Standing Counsel to examine the proposition of law raised by the petitioner, i.e., whether the penalty could have been imposed only under Section 122 of the UP GST Act and not under Section 129(3). The court posted the case for a fresh hearing on 27.02.2020.

FAQs:

Q1: What is the main issue in this case?

A1: The main issue is whether the penalty for the release of goods seized under Section 129 of the UP GST Act can be imposed under Section 129(3) of the Act or only under Section 122.

Q2: What was the court’s decision?

A2: The court did not pass a final decision in this case. It directed the learned Standing Counsel to examine the legal proposition raised by the petitioner and posted the case for a fresh hearing.

Q3: What is the significance of the Govind Enterprises case cited by the court?

A3: The Govind Enterprises case established that the GST Act does not repeal or override the provisions of the IPC or the CrPC, and an FIR can be registered for offenses punishable under the IPC, even if the same conduct is also punishable under the GST Act.

Q4: What are the potential implications of the court’s decision?

A4: The court’s final decision in this case will clarify the scope and applicability of Sections 122 and 129(3) of the UP GST Act in cases involving the seizure and release of goods. It may also provide guidance on the interplay between the GST Act and other laws like the IPC and CrPC.

Q5: What is the next step in the legal proceedings?

A5: The next step is the fresh hearing scheduled for 27.02.2020, where the learned Standing Counsel will examine the legal proposition raised by the petitioner, and the court may pass a final judgment after hearing both sides.

Upon an interception, the petitioner's goods under Section 129 were siezed and the proceedings culminated in an order dated 25.9.2018. This was an order passed under Section 129 (3) of the Uttar Pradesh Goods and Services Tax Act, 2017. Thereafter the petitioner was free to do his trading as prior to the passing of the order the goods and the vehicle had already been released.

After the goods were seized after interception on 15.9.2018, for getting the goods released, the petitioner had approached the High Court which on 9.10.2018 had directed that the petitioner's goods would be released upon the deposit of50 % of the amount demanded. Ultimately the order by which the

proceedings culminated was passed on 25.9.2018. This order was passed under Section 129 (3) of the Uttar Pradesh Goods and Services Tax Act. Against this order, the petitioner filed an appeal which when was dismissed on 25.11.2019 on the ground of delay the instant writ petition has been filed.

The contention of the learned counsel for the petitioner is that the order dated 25.9.2019 could not have been passed under Section 129(3) Uttar Pradesh Goods and Services Tax Act, 2017. He contends that the penalty could have been imposed only under Section 122 of the Uttar Pradesh Goods and Services Tax Act, 2017.

Learned Standing Counsel may examine this proposition of law. Put up this case as fresh on 27.2.2020.

Order Date :- 18.2.2020

PK