M/S Ujala Traders vs. State Of U P And 3 Others
Held
The Court held that the continued detention of the petitioner's goods and vehicle during the pendency of the appeal was not justified. The reasoning was that the petitioner had fulfilled the condition of depositing 10% of the tax and penalty, which automatically stayed the recovery of the balance tax. The Court found that keeping the goods and vehicle seized despite this deposit frustrated the purpose of the appeal filing condition and imposed undue hardship. The ratio decidendi is that if a statutory appeal is filed with the prescribed pre-deposit, and the recovery of the balance amount is stayed, the detaining authority should release the seized goods and vehicle, subject to appropriate security for the remaining penalty amount. The Court directed the petitioner to deposit the balance amount of CGST and SGST and furnish security other than cash and bank guarantee for the remaining penalty amount, along with an indemnity bond. Upon compliance, the goods and vehicle were to be released forthwith.
Facts
The petitioner, M/s Ujala Traders, a registered dealer, had its goods and vehicle detained on October 25, 2018. Subsequently, on November 6, 2018, an order was passed assessing tax and imposing penalties. The tax imposed was CGST of Rs. 28,381.50 and an equal amount of SGST. Penalties levied were Rs. 1,57,675/- for CGST and a similar amount for SGST. The petitioner filed an appeal under Section 107 of the Act, depositing 10% of the tax and penalty amounts. While this deposit automatically stayed the recovery of the balance tax, the detained goods and vehicle were not released.
Key Issues
1. Whether the continued detention of goods and vehicle is justified during the pendency of an appeal, given that the Act provides for appeal decisions within a year? Petitioner's argument: The petitioner contended that keeping the goods and vehicle seized during the appeal process is unjustified. They argued that the appeal process can take time, and continued detention leads to serious civil consequences, negating the purpose of depositing a portion of the tax and penalty as a pre-condition for filing the appeal. Revenue's argument: The judgment does not record any specific arguments made by the respondents (State of U.P. and others).
Sections Cited
Section 107
AI-generated summary — verify with the full judgment below
Court No. - 29 Case :- WRIT TAX No. - 1477 of 2018 Petitioner :- M/S Ujala Traders Respondent :- State Of U P And 3 Others Counsel for Petitioner :- Nishant Mishra Counsel for Respondent :- C.S.C. Hon'ble Pankaj Mithal,J. Hon'ble Ashok Kumar,J. Heard Sri Nishant Mishra, learned counsel for the petitioner and Sri C.B. Tripathi, learned Special Counsel for the respondents. The petitioner is a registered dealer. His goods with the vehicle were detained on 25.10.2018. Finally an order of assessment of tax and penalty was passed on 06.11.2018. On the goods of the petitioner so seized CGST of Rs. 28,381.50 and equal amount of SGST have been imposed with penalty of Rs.1,57,675/- for CGST and similar amount for SGST. The petitioner has preferred an appeal against the aforesaid order under Section 107 of the Act and has deposited 10% of the tax amount and the penalty amount. On depositing of the aforesaid amount though recovery of the balance amount had automatically been stayed but goods and vehicle have not been released. The submission of counsel for the petitioner is that decision of the appeal may take some time as the Act itself provides for decision of appeal within a year. Therefor
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