Detention penalty for invoice-backed goods was unsustainable when consignor and consignee came forward and claimed ownership.

Penalty for detention of goods in transit was held unsustainable where the goods were supported by invoices and both consignor and consignee appeared before the authority claiming ownership. The court noted that the statutory scheme treats cases where the owner comes forward differently from cases where the owner does not, and the clarification relied on treated the consignor as owner in invoice-backed movement of goods. On that basis, invocation of the provision applicable when the owner does not come forward was not justified, especially because the penalty imposed did not match the measure contemplated for a case where liability is ed by the owner. The impugned order was set aside and the matter remitted for fresh decision.

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Issues: Whether penalty for detention of goods in transit was correctly imposed under Section 129(1)(b) of the Uttar Pradesh Goods and Services Tax Act, 2017 when the consignors and consignees had come forward and claimed ownership of the goods.

Analysis: The goods were accompanied by invoices and the consignors and consignees were before the authority accepting ownership of the seized goods. The statutory scheme distinguishes between cases where the owner of the goods comes forward and cases where the owner does not. The clarification relied upon by the Court treated the consignor as the owner where the goods are accompanied by invoices. In such circumstances, invocation of the provision applicable where the owner does not come forward was not justified, particularly when the penalty levied was not aligned with the measure contemplated for the case where the owner accepts liability.

Conclusion: The penalty under Section 129(1)(b) of the Uttar Pradesh Goods and Services Tax Act, 2017 was not sustainable. The impugned order was set aside and the matter was remitted for fresh decision.

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