Penalty Under Sec. 129(1)(b) Invalid for Registered Owner | HC

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Penalty under Section 129 of the CGST Act

Case Details: Aviraj Trading vs. State of U.P. - [2026] 182 taxmann.com 87 (Allahabad)

Judiciary and Counsel Details

  • Saumitra Dayal Singh & Vivek Saran, JJ.
  • Rishi Raj Kapoor for the Petitioner.
  • Arvind Kumar Mishra, Learned counsel for the Respondent.

Facts of the Case

The petitioner challenged the penalty order passed under Section 129(1)(b) of the CGST Act. The petitioner’s goods and conveyance were detained during transit, and a penalty was imposed. It was submitted that at the time of detention, the goods were accompanied by a valid e-way bill and tax invoice. All requisite documents were produced promptly after the detention of the goods, and there was no dispute regarding the owner’s identity or registration status. Despite these facts, the penalty was imposed. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that Section 129(1)(b) applies only in cases where the owner of the goods does not come forward, whereas Section 129(1)(a) governs situations where the owner is identifiable, and the goods are accompanied by proper documents. The Court held that the goods were supported by a valid e-way bill and tax invoice clearly indicating the registered owner, and the invocation of Section 129(1)(b) was legally unsustainable. The Court set aside the impugned penalty order and directed the authorities to determine the penalty strictly in terms of Section 129(1)(a) of the CGST Act read with the Uttar Pradesh GST Act.

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied