Petition dismissed for attempting to circumvent Section 129 GST Act by adding business location after goods detention

The HC dismissed a petition challenging a penalty order under Section 129 of the GST Act, 2017. The petitioner's goods were detained while being transported from one location to another unregistered place. After detention, the petitioner attempted to add an additional place of business through an application based on an affidavit dated prior to the detention. The court found this was a deliberate attempt to circumvent Section 129's strict provisions, which begin with a non obstante clause and have overriding effect. The court emphasized that Section 129 must be complied with in letter and spirit, and rejected the petitioner's post-detention attempt to legitimize the unloading location by adding it as a registered place of business.

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ISSUES:

Whether the provisions of Section 129 of the Goods and Service Tax Act, 2017 ("the Act of 2017") were contravened by unloading goods at a place other than the declared place of business.Whether an application for amendment of registration certificate to add an additional place of business, filed after detention of goods, can be given retrospective effect to avoid penalty under Section 129 of the Act of 2017.Whether the amendment of registration certificate under Rule 19 of the Central Goods and Service Tax Rules, 2017 ("Rules of 2017") can relate back to the date of occurrence of the event warranting such amendment.

RULINGS / HOLDINGS:

The Court held that the provisions of Section 129 of the Act of 2017, which "starts with a non obstante clause," must be complied with in "true letter and spirit" and have overriding effect over other provisions; thus, unloading goods at a place other than the declared place of business constitutes contravention.The Court ruled that an application for amendment of registration certificate to add an additional place of business, if moved only after the goods have been detained, cannot be given retrospective effect to escape penal consequences under Section 129 of the Act of 2017.The Court found that the amendment order dated 18.03.2020 could not relate back to the date of occurrence (29.02.2020) as the application was filed after detention of goods, and the affidavit executed was not a registered document; therefore, the amendment was not effective to avoid penalty.

RATIONALE:

The Court applied the statutory framework of Section 129 of the Act of 2017, emphasizing its overriding effect due to the non obstante clause, which mandates strict compliance regarding movement and unloading of goods.Rule 19 of the Rules of 2017 permits amendment of registration certificates including addition of places of business, but such amendment cannot be used as a shield against penalties if the application is filed after contravention has occurred.The Court distinguished precedents relied upon by the petitioner, noting that in those cases the amendment applications were filed before or during transit of goods, whereas in the present case the application was filed only after detention, indicating an attempt to "escape the wrath of the consequence of Section 129."No doctrinal shift or dissenting opinion was noted; the Court reaffirmed strict enforcement of Section 129 to prevent misuse of retrospective amendments for evading penalties.

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