Penalty Orders Quashed: Search and Seizure Under UP GST Act Deemed Unjustified; Refund Ordered in 4 Weeks.

The HC of Allahabad quashed the penalty orders under Section 129(3) of the Uttar Pradesh GST Act, 2017, deeming them unjustified as they were based solely on a search and seizure. The court allowed the writ petition and directed the respondents to refund the tax and penalty amount to the petitioner within four weeks.

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Issues Involved:
The judgment deals with penalty proceedings under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 following a search of the petitioner's business premises.

Summary:

Issue 1 - Penalty Proceedings u/s 129(3) of the Act:
The petitioner challenged a penalty order dated June 23, 2018, passed under Section 129(3) of the Act, and an appeal order dated May 7, 2019, under Section 107 of the Act. The court noted that penalty proceedings cannot be initiated solely based on a search and seizure of premises, as established in the case of Mahavir Polyplast Pvt. Ltd. Vs. State of U.P. The court found the penalty proceedings unjustified and quashed the impugned orders. The respondents were directed to refund the tax and penalty amount deposited by the petitioner within four weeks.

Conclusion:
The High Court of Allahabad, in the judgment, allowed the writ petition, setting aside the penalty orders and directing the refund of the deposited amount within a specified timeframe.

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