GST transit penalty under the wrong limb set aside; matter remitted for fresh determination on the applicable provision.

Under the GST transit penalty provisions, a penalty imposed under Section 129(1)(b) could not be sustained where the dispute was treated as falling within Section 129(1)(a) and the revenue conceded the legal position. Relying on the departmental clarification dated 31.12.2018 and the earlier decision cited by the petitioner, the HC set aside the penalty order in its present form and remitted the matter to the competent authority for fresh consideration. The controversy was therefore left open for redetermination on the applicable legal basis.

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Issues: Whether the penalty imposed under Section 129(1)(b) of the Goods and Services Tax regime could be sustained when the dispute was stated to fall within Section 129(1)(a).

Analysis: The issue was treated as covered by the departmental clarification dated 31.12.2018 and the earlier decision relied upon by the petitioner. In view of the concession recorded on behalf of the revenue, the penalty order could not be sustained in its present form and required fresh consideration by the competent authority.

Conclusion: The penalty order was set aside and the matter was remitted for passing a fresh order.

Final Conclusion: The petitioner obtained relief against the impugned penalty order, but the controversy was left open for fresh determination by the competent authority.

Ratio Decidendi: Where the nature of penalty under the GST transit provisions is covered by the applicable clarification and the revenue does not dispute the legal position, an order imposing penalty under the incorrect limb cannot stand and must be reconsidered afresh.

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