Goods In Transit Can’t Be Treated As Non-Traceable In Presence Of Tax Invoice, E-Way Bill And Bilty: Allahabad High Court

The Allahabad High Court has quashed the penalty order passed in Form MOU-09 under Section 129(1)(b) of the Goods and Services Tax Act, 2017 on the grounds that the goods in transit were duly accompanied by the tax invoice, e-way bill, and bilty.

The bench of Chief Justice Pritinker Diwaker and Justice Ashutosh Srivastava has relied on the decision of the Allahabad High Court in the case of M/s Sahil Traders vs. State of U.P., in which it was held that in the face of the tax invoice and the E-way bill produced by the petitioner, the goods may not have been treated as not traceable to a registered dealer.

The petitioner has challenged the penalty order passed by the Assistant Commissioner in Form MOU-09 under Section 129(1)(b) of the Goods and Services Tax Act, 2017. The order imposes a penalty of Rs. 48,53,940 by not treating the petitioner as the owner of goods.

The petitioner argued that the goods were duly accompanied by the tax invoice, e-way bill, and bilty issued in the name of the petitioner as the consignor, and the goods were in transit through the State of U.P. during their movement from Kolkata to New Delhi. There was no intention to evade tax.

The petitioner submitted that he was the owner of the goods and was ready and willing to deposit a penalty under protest under Section 129(1)(a) to get the goods released, considering the perishable nature of the goods and the substantial diminishing of their value with the onset of monsoons.

The department contended that the petitioner has rightly been held not to be the owner of the goods and that the penalty has rightly been imposed upon the petitioner under Section 129(1)(b).

The court set aside the penalty order and directed the department to pass a fresh order treating the petitioner as eligible for the benefit of Section 129(1)(a) of the GST Act.

Case Title: M/S Bhawani Traders vs. State of U.P. 2023 LiveLaw (AB) 231 [Writ Tax No. - 854 Of 2023]

Case Citation: 2023 LiveLaw (AB) 231

Date: 24.7.2023

Counsel For Petitioner: Shubham Agrawal

Counsel For Respondent: C.S.C.

Click Here To Read The Order