Landmark GST Detention Order: Partial Validation with Directive for Penalty Recalculation Under Section 129(1)(a)

HC ruled that detention order under GST Act was partially valid. While goods were properly documented, the penalty calculation was incorrect. Court quashed the original penalty order and directed the Assistant Commissioner to recalculate penalty under section 129(1)(a) within seven days, allowing petitioner to pursue additional legal remedies.

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Issues involved:
The issues involved in this case are the legality of the detention order u/s 129(1) of the Uttar Pradesh Goods and Services Tax Act, 2017, and the penalty imposed u/s 129(1)(b) of the Act.

Detention Order and Penalty Imposed:
The writ petitioner challenged the detention order dated November 9, 2023, and the subsequent penalty imposed under section 129(1)(b) of the Act. The petitioner argued that the goods were not mis-declared and relied on a judgment from the Kerela High Court to support this claim. It was contended that as the owner of the goods, a specific circular would apply to him. The Court noted that the goods were detained along with proper e-invoice and e-way bill, and held that the petitioner should be treated as the owner of the goods.

Release of Goods and Penalty Calculation:
The Court determined that the release of the goods should be made upon payment of penalty u/s 129(1)(a) of the Act. However, the penalty quantified by the Assistant Commissioner under section 129(1)(b) was deemed unlawful. Consequently, the impugned order dated November 22, 2023, was quashed, and the Assistant Commissioner was directed to recalculate the penalty within seven days in accordance with section 129(1)(a) of the Act. The petitioner was given the liberty to approach the appropriate authority for other issues raised in the writ petition.

Disposition of the Writ Petition:
The Court disposed of the writ petition with the above directions, thereby concluding the legal proceedings in this matter.

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