2024 (3) TMI 785 - HC - GST

Authorities Lack Jurisdiction in GST Search and Seizure, Penalty Proceedings Quashed Under Section 129(3)

M/s. Poddar Trading Company Versus Commissioner, Commercial Tax U.P. And Another

HC quashed penalty proceedings under Section 129(3) of UP GST Act, finding the search and seizure under Section 67 conducted without proper jurisdiction. ... Penalty proceedings u/s 129(3) of UPGST Act - search and seizure is carried out at the godown - subsequent to search and seizure carried out under Section 67 of the Act, penalty proceedings have been launched - HELD THAT:- There does not seem to be any controversy with regard to the facts as penned in the writ petition with regard to the imposition of the penalty under Section 129 (3) of the Act, in spite of there being search and seizure carried out under Section 67 of the Act. The entire proceedings that have been initiated have no feet to stand, and accordingly, the impugned orders dated June 15, 2018 and May 1, 2019 are quashed and set aside - Petition allowed. Issues Involved:The issues involved in this case are the validity of penalty proceedings under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 following a search and seizure under Section 67 of the Act.Validity of Penalty Proceedings under Section 129(3):The petitioner challenged the penalty proceedings initiated under Section 129(3) of the Act following a search and seizure conducted under Section 67. The petitioner relied on a judgment of a coordinate Bench to support the argument that penalty proceedings cannot be initiated in such circumstances. The Court noted that the authorities conducted the search and seizure at the godown premises without proper jurisdiction, as no action was taken under Section 67 of the Act, which necessitates 'reasons to believe.' The Court criticized the negligence of the authorities and highlighted that the search was directed at an immovable property, namely a godown premise, rather than a vehicle. The Court held that the penalty proceedings against the petitioner under Section 129(3) were without jurisdiction.Quashing of Impugned Orders:The Court found no controversy regarding the imposition of the penalty under Section 129(3) despite the search and seizure under Section 67. Consequently, the Court held that the penalty proceedings initiated against the petitioner had no legal basis. Therefore, the Court quashed and set aside the impugned orders dated June 15, 2018, and May 1, 2019.Conclusion:In conclusion, the High Court allowed the writ petition, ruling in favor of the petitioner by quashing the penalty proceedings initiated under Section 129(3) of the Act. The Court ordered that there shall be no costs imposed in this matter.