M/S. Aaria Enterprises vs. The State Of Bihar

Held

The Court held that the contention of the petitioner that the author of the action taken under Section 129(3) of the CGST Act has no power to evaluate the value of goods is not tenable. The Court reasoned that Section 129(3) empowers the proper officer to specify the penalty payable, which necessarily involves evaluating the goods and corroborating material evidence like invoices and e-way bills. The Court also found that the petitioner had not adequately explained the meaning of 'specifying the penalty payable' without assessing and valuing the goods. Furthermore, the Court noted that the petitioner had not cooperated with the proceedings, and the supplier and recipient appeared to be potentially non-genuine taxpayers. Given these findings and the fact that a statutory remedy of appeal is available, the Court directed the petitioner to avail the appellate remedy. The Court reserved liberty to the petitioner to file an appeal within one month, and requested the appellate authority to decide the appeal within three months of receipt.

Facts

The petitioner, M/s. Aaria Enterprises, filed a writ petition before the Patna High Court challenging an order dated May 22, 2025, passed by the Assistant Commissioner of State Tax, Supaul Circle, Bihar. This order, issued under Section 129(3) of the CGST Act, 2017, imposed a penalty of Rs. 8,17,766/- for the tax period of May 2025. The petitioner also sought to set aside various notices and orders issued during the detention and seizure of goods and the conveyance. The goods were intercepted and detained by the respondent authorities. The petitioner argued that the officer who invoked Section 129(3) lacked the power to evaluate the value of the goods. The impugned order noted that the petitioner did not cooperate and that the supplier and recipient might not be genuine taxpayers.

Key Issues

1. Whether the Assistant Commissioner of State Tax, acting under Section 129(3) of the CGST Act, 2017, has the power to evaluate the value of goods for determining the penalty. 2. Whether the petitioner is required to exhaust the remedy of appeal before the appellate authority before approaching the High Court under its writ jurisdiction. The petitioner contended that the officer issuing the order under Section 129(3) of the CGST Act, 2017, does not possess the authority to evaluate the value of goods. They argued that the penalty specified under this sub-section should be determined without necessarily assessing the goods and their valuation. The petitioner also sought to challenge the various notices and orders, deeming them illegal and without jurisdiction. The respondents, represented by Standing Counsel, did not explicitly record their arguments on the specific points raised by the petitioner in the provided text, but the court's decision implies a reliance on the statutory appeal mechanism.