M/S Arihant Iron Traders vs. State Of U.P. And Another

Facts

The petitioner, M/s Arihant Iron Traders, filed a writ petition seeking a mandamus directing the respondent authorities to refund tax and penalty of Rs. 4,24,620/- deposited under protest. Alternatively, they sought a mandamus directing respondent no. 2 to pass or serve a copy of the penalty order. The petitioner contended that the penalty order violated Circular No. 2021007 dated 09.07.2020 and Circular No. 41/15/2018-GST dated 13.04.2018, which prescribes procedures for interception, detention, and release of goods in movement. The petitioner argued that respondent no. 2 failed to consider their refund claim despite the deposit made under protest and the relevant circulars. The respondents stated that appropriate steps would be taken to decide the petitioner's claim, for which a representation had already been filed.

Held

The Court, without entering into the merits of the case, disposed of the writ petition. The Court expected respondent no. 2 to consider and decide the petitioner's claim expeditiously, preferably within a period of two weeks from the date a copy of the order is filed. The Court did not make any specific finding on the alleged violation of the circulars or the validity of the penalty order, nor did it decide on the refund claim itself. The operative direction was to expedite the decision-making process by the respondent authority. The issue of whether the penalty order was in violation of the circulars and the consequential refund claim were implicitly left to be decided by the respondent no. 2.

Key Issues

1. Whether the penalty order passed against the petitioner is in violation of Circular No. 2021007 dated 09.07.2020 and Circular No. 41/15/2018-GST dated 13.04.2018, particularly paragraph 2(h) thereof, concerning the procedure for release of goods and conveyance upon payment of tax and penalty under Section 129(1) of the CGST Act. Petitioner's Arguments: The petitioner argued that the penalty order was passed in violation of the aforementioned circulars. They contended that Circular No. 41/15/2018-GST, specifically paragraph 2(h), outlines the procedure for releasing goods and conveyance after tax and penalty are paid, and that respondent no. 2 failed to adhere to this procedure and did not pass any order regarding their refund claim. The petitioner emphasized that the tax and penalty were deposited under protest. Respondent's Arguments: The respondents submitted that they would take appropriate steps to decide the petitioner's claim, as the petitioner had already moved a representation in this regard.