The Allahabad High Court, in a petition, filed challenging the order of confiscation passed under Section 130 of the Uttar Pradesh Goods and Services Tax Act, 2017, held that once the Appellate Authority has recorded a specific finding that quantification of stock was based on eye estimate and not in accordance with law, the confiscation order as well as the penalty order are liable to be set aside.
Brief Facts:
The petitioner filed the present petition challenging the order of confiscation passed under Section 130 of the Uttar Pradesh Goods and Services Tax Act, 2017 and the subsequent levy of penalty under Section 122 of the Act. Further challenge was raised to the order passed under Section 74 of the Act by the Assessing Authority for the liability on the additional stock which was present on the petitioner's premises. The petitioner also challenged the subsequent orders of the Appellate Authority which upheld the orders of the Assessing Authority.
Contentions of the Applicant:
The learned counsel appearing on behalf of the petitioner has relied on two judgments of the coordinate Bench of this Court in the case of M/s Maa Mahamaya Alloys Pvt. Ltd. vs. State of U.P. and others reported in 2023 82 NTN DX 393 and in the case of M/s Metenere Ltd. vs. Union of India in support of his arguments, wherein it was held that confiscation of the stock cannot be done only on the basis of eye estimation.
Observations of the court:
The court stated that the Appellate Authority had specifically recorded that the goods were valued based on eye estimate and were not specifically weighed and counted and further stated that the reduction of penalty by the Appellate Authority was based on an estimate which was not permissible in law. The court further stated that the authorities had acted in a callous manner by issuing the confiscation order 11 months after the survey had been conducted and further such inordinate delay in issuing show cause notice goes to the root of the matter.
The court further stated that the Appellate Authority had specifically recorded that the goods were valued based on eye estimate and were not specifically weighed and counted and the reduction of penalty by the Appellate Authority was based on an estimate which was not permissible in law.
The court held that the authorities had acted in a callous manner by issuing the confiscation order 11 months after the survey had been conducted and such inordinate delay in issuing show cause notice goes to the root of the matter.
The decision of the Court:
The court set aside the confiscation order passed under Section 130 of the Act as well as the penalty order under Section 122 of the Act.
Case Title: M/S Eco Plus Steels Pvt. Ltd. vs State of U.P and Ors.
Coram: Hon’ble Mr. Justice Shekhar B. Saraf
Case No.: WRIT TAX No. - 916 of 2022
Advocate for the Petitioner: Aloke Kumar
Advocate for the Respondent: C.S.C.
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