Sai Ashok Transport Co vs. Commissioner Commercial Taxes Lucknow And Another

Held

The Court held that the petitioner's submission was misconceived. It reasoned that the liability to pay tax under the CGST Act, 2017, is independent of the tax liability under the SGST Act, 2017, as both are independent provisions that can be attracted simultaneously. Consequently, the First proviso to Section 29(6) cannot be interpreted to mean that only a single penalty of Rs. 1,00,000/- is payable. The Court found no exception to be taken to the impugned order. The writ petition was accordingly dismissed.

Facts

The petitioner, Sai Ashok Transport Co., a transporter of seized goods, challenged an order passed under the First proviso to Section 29(6) of the CGST/SGST Act, 2017. The order directed the petitioner to deposit Rs. 1,00,000/- towards penalty under the CGST Act and simultaneously Rs. 1,00,000/- towards penalty under the SGST Act. The petitioner argued that the proviso allows for the release of goods upon depositing the penalty under Section 29(3) or Rs. 1,00,000/-, whichever is less, and that levying the penalty twice for a single offense was illegal.

Key Issues

1. Whether the First proviso to Section 29(6) of the CGST/SGST Act, 2017, permits the imposition of penalty twice, once under the CGST Act and once under the SGST Act, for the same offense, in light of the petitioner's contention that only one penalty or Rs. 1,00,000/- should be deposited. Petitioner's argument: The petitioner contended that the wording of the First proviso to Section 29(6) indicates a legislative intent to deposit the lesser amount, and that imposing Rs. 1,00,000/- twice under both CGST and SGST Acts for a single offense is illegal, as one offense cannot attract double penalty. Respondent's argument: The respondent (Commercial Tax Department) implicitly argued, through the court's reasoning, that the liabilities under the CGST Act and SGST Act are independent and can be attracted simultaneously, thus justifying the dual penalty.