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Gold Transporter Wins Challenge Against Penalty for Minor Delivery Challan Discrepancy Involving Kundan Stones Under CGST Act HC quashed penalty order against gold jewellery transporter for minor Delivery Challan discrepancy involving Kundan stones. The court found authorities ...
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Gold Transporter Wins Challenge Against Penalty for Minor Delivery Challan Discrepancy Involving Kundan Stones Under CGST Act
HC quashed penalty order against gold jewellery transporter for minor Delivery Challan discrepancy involving Kundan stones. The court found authorities erroneously imposed penalty under CGST Act without appreciating technical compliance with Rule 55. HC directed refund of Rs. 14,50,560 and permitted potential limited proceedings regarding Kundan stones non-disclosure.
Issues involved: Quashing of impugned order, violation of Rule 55 of CGST Rules, imposition of penalty, discrepancy in Delivery Challan, appeal dismissal by Appellate Authority.
Violation of Rule 55 of CGST Rules: The petitioner transported gold jewellery from Mumbai to Bengaluru, and an order for vehicle verification was issued leading to penalty imposition under Section 129(3) of the CGST Act. The petitioner contended that there was no violation of Rule 55 of the CGST Rules as per the Delivery Challan and minor discrepancies should not warrant penalty imposition. The Authorities erroneously invoked Rule 55 without appreciating that the non-disclosure of Kundan stones in the Delivery Challan did not constitute a violation.
Discrepancy in Delivery Challan: The petitioner complied with all requirements of Rule 55 except for not mentioning Kundan stones in the Delivery Challan. The Authorities wrongly concluded that there was a mismatch between the goods and the Delivery Challan, leading to the imposition of a penalty. It was argued that the gold ornaments were meant for sample purposes, not for sale, as indicated in the Delivery Challan, and the penalty was unjustified.
Quashing of Impugned Order: The High Court quashed the impugned order passed by the Original Authority and the Appellate Authority, directing the refund of the penalty amount of Rs. 14,50,560 to the petitioner. The Court held that the Authorities erred in presuming the purpose of transporting the gold ornaments and wrongly imposed the penalty based on incorrect assumptions. The Court granted liberty to the respondents to proceed against the petitioner only for the alleged mismatch of Kundan stones not shown in the Delivery Challan.
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