Mahavir Polyplast PVT. LTD. vs. State Of U.P. And 2 Others

Held

The Court held that the entire proceedings drawn up against the petitioner under Section 129(3) of the Act were without jurisdiction. The Court found it unbelievable that two Mobile Squad authorities acted negligently, invoking Section 129(3) to subject a godown premises to search and seizure without adhering to the requirements of Section 67 of the Act, which mandates "reasons to believe" for searching premises. Furthermore, the Court noted that both Assistant Commissioners deliberately described the subject of their action as "UPGODOWN02" and "GODOWON", indicating their awareness that the search was directed at an immovable property (godown) and not a vehicle. The Court quashed the appellate orders dated 26.11.2019 and 22.11.2019. Any amount deposited by the petitioner was ordered to be refunded with interest at 8%, subject to adjudication proceedings. The Court also directed the Commissioner, Commercial Tax UP, to look into the matter, call for explanations from the erring officers, and take appropriate action to prevent future occurrences.

Facts

Mahavir Polyplast Pvt. Ltd. (the petitioner) filed two writ petitions challenging orders dated 26.11.2019 and 22.11.2019 passed by the Additional Commissioner Grade-2 (Appeal)-2. These appellate orders dismissed the petitioner's appeals against earlier orders dated 16.08.2018 and 27.08.2018, passed by Assistant Commissioners (Mobile Squad) of Agra. The original orders imposed a tax and penalty of Rs. 4,99,813/- each on the petitioner for the tax period 2018-19, arising from a search and seizure operation conducted by the Special Investigation Branch on 07.08.2018 at the petitioner's business premises. The petitioner disputed allegations of stock shortage and argued that its other godown, not searched, contained the missing stock. Despite this, two separate show cause notices were issued under Section 129(3) of the UP GST Act, 2017, by different Assistant Commissioners, leading to the impugned orders.

Key Issues

1. Whether the Assistant Commissioners, acting under Section 129(3) of the Uttar Pradesh Goods And Services Tax Act, 2017, had the jurisdiction to initiate proceedings and seize goods from a godown premises, when their powers under Section 129 are generally related to the movement of goods in transit and not storage premises, especially when no action was contemplated or taken under Section 67 of the Act which deals with search and seizure of premises. 2. Whether the issuance of two separate show cause notices under Section 129(3) of the Act by two different Assistant Commissioners for the same search and seizure operation conducted at the petitioner's godown premises was legally valid and within their jurisdiction. Petitioner's Contention: The petitioner argued that the proceedings under Section 129(3) were initiated without jurisdiction as the authorities were attempting to search and seize goods from a godown, not a vehicle in transit, and that the description of the subject as "Vahan Sankhiya UPGODOWN02" and "GODOWON" indicated awareness that the search was not of a vehicle. The petitioner also highlighted the illegality of two separate proceedings for the same transaction. Respondent's Contention: The judgment does not record specific arguments made by the State.