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Case Summary:  M/S Fadil Enterprises v. State of U.P. and Another (Writ Tax No. 1333 of 2024):

Case No.: WRIT TAX No. - 1333 of 2024

Court: High Court of Judicature at Allahabad (Court No. 40)

Neutral Citation No.: 2024:AHC:142435-DB

Date of Order: September 3, 2024

Counsel for Petitioner: Rishi Raj Kapoor

Counsel for Respondent: C.S.C.

Hon’ble Judges: Shekhar B. Saraf, J. and Manjive Shukla, J.

Facts of the Case:

·        The petitioner, M/S Fadil Enterprises, filed a writ petition under Article 226 of the Constitution of India against the respondent authorities for detaining their goods and vehicle. The issue was focused on the detention and subsequent orders passed under Section 129 of the Central Goods and Services Tax Act, 2017 (CGST Act). The petitioner restricted the prayers to the proceeding initiated under Section 129 of the CGST Act.

Main Issue:

·        The main issue was whether the detained goods should be released under Section 129(1)(a) or Section 129(1)(b) of the CGST Act.

Submissions by the Petitioner: The counsel for the petitioner argued that:

·        The petitioner is the rightful owner of the goods.

·        Therefore, the goods should be released under Section 129(1)(a) of the CGST Act, which pertains to the owner of the goods.

·        The authorities wrongly calculated the penalty under Section 129(1)(b), which applies to persons other than the owner, in their order dated July 27, 2024.

·        Additionally, the petitioner relied on the case M/s Halder Enterprises v. State of U.P. and Others (2024 (2) ADJ 660 (DB)) to argue that their case is similar and covered under this precedent.

Submissions by the Respondent:

·        The counsel for the respondents defended the actions of the authorities, stating that they had correctly followed the law when calculating the penalty under Section 129(1)(b) of the CGST Act.

Findings and Judgement of the Court:

·        Upon examining the record and considering the arguments, the Court found that:

·        The facts and issues in this writ petition were substantially similar to the case of M/s Halder Enterprises.

·        Based on the ruling in the Halder Enterprises case, the goods should be released under Section 129(1)(a) of the CGST Act.

·        The Court, therefore, saw no reason to depart from the decision in the earlier case.

·        The order passed by the authorities on July 27, 2024, was quashed and set aside.

Conclusion: The Court directed the authorities to carry out the release of the goods under Section 129(1)(a) of the CGST Act within three weeks. The petitioner’s other prayers were not pressed and could be pursued in an appropriate forum. The writ petition was allowed.

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