2025 (7) TMI 787 - HC - GST

Levy of penalty u/s 129(1)(b) of the CGST Act - petitioner is not the owner of goods - HELD THAT - Since the petitioner s name is there in the invoice and the petitioner has approached the authorities concerned for release of the goods Clause No.6 in Circular No.76/50/2018-GST dated December 31 2018 shall apply to the petitioner and it would be deemed that the petitioner is the owner of the goods. The impugned order dated June 24 2025 is quashed and set aside with a direction upon the authority concerned to grant an opportunity of hearing to the petitioner and thereafter pass a reasoned order in accordance with law keeping in mind the principle laid down in M/s Halder Enterprises 2023 (12) TMI 514 - ALLAHABAD HIGH COURT within a period of eight weeks from date. Petition disposed off.

Summary

The Allahabad High Court, in a writ petition under Article 226 challenging the order dated 24.06.2025 passed under Section 129(3) of the UP GST Act 2017, quashed the penalty imposed under Section 129(1)(b) of the CGST Act. The Court relied on its precedent in M/s Halder Enterprises v. State of U.P., 2024 (2) ADJ 660 (DB), and departmental Circular No.76/50/2018-GST (dated 31.12.2018), emphasizing that:- The petitioner's response via registered email on the portal cannot be held against him, especially absent any personal summons or failure to appear.- The mere absence of business activity at the principal place of business does not justify presuming the invoice was fake or that the petitioner is not the owner of the goods.- Since the petitioner's name appeared on the invoice and he sought release of the goods, Clause 6 of the circular applies, deeming the petitioner as the owner of the goods.The Court set aside the impugned order and directed the authority to provide the petitioner an opportunity of hearing and pass a reasoned order in accordance with law within eight weeks, adhering to the principles in M/s Halder Enterprises. The writ petition was accordingly disposed of.