Adv. Rahul Sankhla

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M/s HALDER ENTERPRISES Vs STATE OF UTTAR PRADESH AND OTHERS

Neutral Citation No. – 2023:AHC:227182-DB and WRIT TAX No. – 1297 of 2023

  1. Useful: Where department denies ownership despite valid transport documents. The invoice or any other specified document accompanying the goods, then either the consignor or the consignee should be deemed to be the owner.
  2. Court & date: IN THE HIGH COURT OF ALLAHABAD – DB;  Order Dated: December 11, 2023
  3. Statutory provisions: Section 129 of the CGST Act, 2017
  4.  Facts:
    • The goods were on its way from Calcutta to New Delhi.
    • They were intercepted in the State of U.P. on October 3, 2023.
    • That upon physical verification, there was no discrepancy in the consignment and the goods were as per the invoice and E-way bill.
    • However, the goods were detained on October 11, 2023 on the ground that both the consignor and consignee were declared as non-existent.
    • It is to be noted that on the date of interception that is October 3, 2023, the petitioner was having a registration under the CGST Act.
    • That the registration was subsequently suspended on October 06, 2023 by the authorities at West Bengal with effect from September 18, 2023.
    • Upon the detention being made, the petitioner being the owner of the goods came forward and sought for release of the goods under Section 129(1)(a) of the CGST Act. However, the authorities have determined the penalty to be paid as per Section 129(1)(b) of the CGST Act.
  5. Issue involved: whether the goods may be released by the authorities under Section 129(1)(a) or 129(1)(b) of the CGST Act. (Para 3)
  6. The petitioner relied upon circular 76/50/2018-GST dated 31st December 2018 and contended that they are the owner of the goods and, therefore, goods are to be released as per Section 129(1)(a) of CGST Act while the authorities have made the calculation under Section 129(1)(b) of the CGST Act.
  7. Court findings: The Court relying upon M/s Sahil Traders v. State of U.P. and another, 2023:/AHC:116953-DB; and M/s Sanjay Sales Agency v. State of U.P. and another, 2023:AHC:193624-DB held that the goods were found with proper tax invoice and E-way bill belonging to the petitioner. Hence, Circular dated December 31, 2018 would apply and the petitioner would be deemed to be the owner of the goods. Ergo, the goods would have to be released in terms of Section 129(1)(a) of the CGST Act.

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