Siddhi Vinayak Footwear Vs State of Uttar Pradesh
Date: November 18, 2025
Subject Matter
Penalty Under Section 129(1)(b) Is Not Meant For Cases Where The Owner Is Traceable
Summary
The present petition challenges a penalty order issued in Form GST MOV-09 dated October 25, 2025. The penalty was imposed following the interception of goods that were allegedly not accompanied by a valid e-way bill.
The High Court allowed the petition, setting aside the penalty order and directing the adjudicating authority to re-determine the penalty under the correct statutory provision.
Core Issue: Penalty Calculation Section
The central issue was the section used for penalty computation:
Fact: The goods were accompanied by a tax invoice clearly disclosing the full particulars of the owner, a registered dealer.
Petitioner's Contention: Any infringement should result in a penalty under Section 129(1)(a) of the U.P. Goods and Services Tax Act, 2017 (100% of tax payable).
Adjudicating Authority's Error: The authority erroneously computed the penalty under Section 129(1)(b) (50% of the value of the goods, or 200% of the tax, whichever is higher, reserved for cases where the owner is unregistered or non-traceable).
Ruling and Directions:
The Court found the facts to be similar to the binding precedent of Halder Enterprises Vs. State of U.P. and ruled that the penalty was erroneously computed.
Penalty Order Quashed: The impugned penalty order in Form GST MOV-09 dated October 25, 2025, is set aside.
Direction for Re-computation: The Adjudicating Authority is directed to determine the quantum of penalty strictly in accordance with Section 129(1)(a) of the Act within a period of three weeks from today.
Release of Goods: The goods may be released forthwith, subject to the petitioner depositing the penalty amount as calculated under the provisions of Section 129(1)(a) on the value of the goods as mentioned in the tax invoice.
Remedies Reserved: If any other dispute survives arising from the penalty order after re-computation, the petitioner may avail their statutory remedies in accordance with law.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Parth Goswami, Advocate holding brief of learned counsel for the petitioner and Sri Arvind Kumar Mishra, learned counsel for the revenue.
2. Present petition has been filed for the following relief:
“i) issue a writ or direction or pass an order in the nature of Certiorari quashing the impugned Order in MOV-09 dated notice in DRC-01/Form GST MOV-07 dated 25.10.2025 and the impugned order issued in GST Form GST MOV-09 dated 18.10.2025 passed by the Office of Assistant Commissioner, State Tax, Jurisdiction Sector-3 (Mobile Squad-4), Gautam Buddha Nagar Uttar Pradesh, the respondent no.2, (Annexure No. 11 & 9 to the writ petition.”
3. Submission is, undeniably, goods were found accompanying with the tax invoice clearly disclosing full particulars of the owner of the goods, a registered dealer.
4. Thus, whatever infringement may have been alleged for reason of e-way bill not accompanying the goods, it may have resulted in penalty in terms of Section 129(1)(a) of the U.P. Goods and Services Tax Act, 2017 (hereinafter referred to as the ‘Act’), only. However, the Adjudicating Authority has erroneously computed the penalty in terms of Section 129(1)(b) of the Act. On that issue, reliance has been placed on Halder Enterprises Vs. State of U.P.; (2023) 13 Centax 144 (All). That petition was allowed on the following terms:
“12. In light of the above, the order passed by the authorities dated October 19, 2023 is quashed and set aside. The authorities are directed to carry out the exercise in terms of Section 129(1)(a) of the CGST Act within a period of three weeks from today.”
5. For reason of similar facts and there have been no other dispute, no useful purpose would be served in keeping the present petition pending or calling for counter affidavit at this state, let the writ petition be decided with the consent of the parties at the fresh stage.
6. Accordingly, the impugned order dated 25.10.2025 is set aside with the direction upon the authorities to determine the quantum of penalty in accordance with Section 129(1)(a) of the Act within a period of three weeks from today.
7. Subject to the petitioner depositing the penalty amount in terms of Section 129(1)(a) of the Act on the value of the goods as mentioned in the tax invoice, the goods may be released forthwith.
8. If any other dispute survives arising from order imposing penalty, the petitioner may avail its statutory remedies in accordance with law.
9. With the aforesaid observation, present petition stands disposed of. Pending application/s, if any, stand disposed of.