UPGST | Search And Seizure Of Godown Can't Result In Penalty Proceedings U/S 129 Of Act: Allahabad High Court Reiterates

The Allahabad High Court has reiterated that search and seizure of a godown of an assesee cannot be penalised in proceedings under Section 129 of the Uttar Pradesh Goods and Services Tax Act, 2017.

Section 129 of the Act provides procedure for detention, seizure and release of goods and conveyances which have been intercepted in transit and are found to be in contravention of the statute.

Proceedings under Section 129(3) of the Act were initiated against the petitioner-assesee pursuant to search and seizure operation at his premises. A penalty order was passed under Section 129 which was upheld by the first appellate authority. Due to lack of GST Tribunal in the State of U.P., the petitioner approached the High Court.

The Court relied on Mahavir Polyplast Pvt. Ltd. Vs. State of U.P. and 2 others, wherein a coordinate bench had held that

“The provision of Section 129(3) of the Act could not be invoked to subject a godown premises to search and seizure operation unmindful of the Act that no action was taken or contemplated under Section 67 of the Act, as that would have mandated existence of "reasons to believe", to subject that premise to search and seize goods or documents found therein.”

Accordingly, the Court quashed the penalty order under Section 129 of the Act as well as the order of the first appellate authority.

Case Title: M/S Gopi Chand Batra Traders vs. State Of U.P. And 2 Others 2024 LiveLaw (AB) 126 [WRIT TAX No. - 1632 of 2018]

Case Citation: 2024 LiveLaw (AB) 126

Counsel for Petitioner: Shubham Agrawal

Counsel for Respondent: Ravi Shanker Pandey

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