Goods in Transit: Valid Documentation Defeats Penalty, Provides Path for Further Legal Challenge Under GST Act Section 129

The HC allowed the writ petition challenging a penalty order under GST Act. The court found the penalty under Section 129(1)(b) unjustified, given the petitioner possessed valid documentation proving ownership of goods in transit. The HC directed reconsideration of the penalty under Section 129(1)(a) and granted the petitioner liberty to pursue additional legal remedies against the assessment order.

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Issues involved:
The judgment deals with a penalty order passed under Section 129(1)(b) of the Goods and Services Tax Act, 2017, where the petitioner was penalized for not being treated as the owner of goods despite having relevant documents like tax invoice, e-way bill, and bilty in their name. The primary issue was whether the petitioner should be considered the owner of the goods and if the penalty imposed was justified.

Details of the Judgment:
1. The petitioner, through their counsel, argued that they were the rightful owner of the goods in transit and were willing to deposit the penalty under protest to release the goods due to their perishable nature. Reference was made to a previous court decision that applied directly to the current case.

2. The revenue's counsel contended that the petitioner was correctly not considered the owner of the goods, justifying the penalty under Section 129(1)(b). However, it was acknowledged that the intention to evade tax is a prerequisite for such penalties. The presence of e-way bills as title documents with the goods contradicted the revenue's conclusion that the petitioner was not the owner, suggesting the penalty should have been initiated under Section 129(1)(a).

3. The court, in agreement with a previous decision, set aside the penalty order and directed the Respondent to reconsider the case under Section 129(1)(a) instead of (b). The writ petition was allowed, granting relief to the petitioner.

4. Additionally, the petitioner was given the liberty to pursue any available remedy to challenge the assessment order, ensuring their right to further legal recourse.

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