Transit detention penalty reduced under GST law where the higher levy was found excessive and the lesser statutory measure applied.

Where a dispute under the transit detention provisions of the U.P. GST Act concerned only the quantum of penalty, the HC held that the higher penalty under Section 129(1)(b) was excessive on the facts. Treating the owner as bona fide, the Court found the revenue's insistence on the higher rate harsh and unreasonable and reduced the penalty to the lesser statutory measure under Section 129(1)(a). The modified demand was directed to operate accordingly, with the writ petition succeeding only to that extent.

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Issues: Whether the penalty imposed for transit detention of goods could be sustained at the higher rate under Section 129(1)(b) of the U.P. G.S.T. Act, 2017, or was liable to be reduced to the measure prescribed under Section 129(1)(a) of that Act.

Analysis: The only dispute pressed was as to the quantum of penalty and not the levy itself. The petitioner was treated as the bona fide owner of the goods, and the Court found the revenue's insistence on the higher penalty rate to be harsh and unreasonable. In the circumstances, the penalty was considered fit for modification to the lesser statutory measure.

Conclusion: The penalty was reduced in accordance with Section 129(1)(a) of the U.P. G.S.T. Act, 2017, namely to twice the amount of tax on the value of the goods, in place of the higher penalty under Section 129(1)(b).

Final Conclusion: The writ petition succeeded only to the extent of reduction of penalty, and the modified demand was left to operate accordingly.

Ratio Decidendi: Where the dispute concerns only the quantum of penalty under the transit detention provisions of the GST law, the Court may interfere to apply the lesser statutory measure when the higher levy is found excessive in the circumstances.

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