High Court stays penalty proceedings, directs counter affidavits

The Allahabad High Court acknowledged the petitioner's arguments challenging penalty proceedings under Section 129(3) of the UPGST Act, 2017. The Court found merit in the petitioner's contentions and directed the State's Special Counsel and respondents' counsel to file counter affidavits. A stay order was issued, halting the enforcement of the penalty until further court instructions. The case was scheduled for prompt listing after the filing deadlines for affidavits.

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Issues: Challenge to penalty proceedings under Section 129(3) of the UPGST Act, 2017.

In the judgment delivered by the Allahabad High Court, the petitioner challenged penalty proceedings initiated under Section 129(3) of the UPGST Act, 2017. The petitioner contended that goods were detained and seized, leading to the initiation of penalty proceedings and subsequent imposition of a penalty equivalent to the tax amount. Despite the release of goods upon tax deposit, the penalty proceedings continued, resulting in a penalty order dated 7th February, 2018, which was appealed before the Additional Commissioner under Section 107 of the Act. The appeal was dismissed, and due to the non-constitution of the tribunal, the petitioner resorted to challenging the penalty order through a writ petition.

The Court acknowledged the prima facie substance in the arguments presented by the petitioner, warranting further consideration. Consequently, the Court directed the learned Special Counsel for the State and the counsel for the respondents to file a counter affidavit within a month, allowing for a rejoinder affidavit within ten days thereafter. The Court scheduled the case for listing immediately after the specified period. Additionally, the Court issued a stay order, preventing the realization of the penalty amount from the petitioner until further orders were issued.

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