Order Date – 06 December 2022

Parties: M/s Ganpati Battery Traders Vs State of U.P. And 2 Others

Facts –

• The Petitioner, M/s Ganpati Battery Traders is engaged in the business of sale and purchase of old batteries.
• The truck sent by the petitioner was intercepted on 23.2.2022. The truck was detained for verification under Section 20 of the Integrated Goods and Service Tax Act, 2017 read with Section 68(3) of the Central Goods and Service Tax Act, 2017.
• It was alleged that the petitioner was trying to evade payment of tax and the battery was sold in terms of per piece and not according to the weight.
• Consequent to the issue of notice, the petitioner deposited the entire amount of penalty, and the truck along with goods were released on 1.3.2022. 

Issue –

• Whether the penalty imposed is in order?

Order –

• The Hon’ble High Court observed that the adjudicating authority while passing the order dated 1.3.2022 has not recorded any finding as to how the explanation accorded by the petitioner cannot be accepted and the trade practice of purchase and sale of battery is according to weight and not per piece.
• The description in the tax invoice, and consignment note also clearly mentions damaged batteries, large and small, which were being transported to Gwalior. Further, this Court finds that Rule 46 of CGST Rules, 2017, which has been relied heavily by the State, also does not provide for the stand taken by the State, and it only provides the description which the seller is to give while the goods are sold, which, in the present case, has been done by the petitioner.
• The appellate order dated 30.4.2022 have no legs to stand as no reasoning has been accorded by either of the authorities in consonance with the law so as to hold that the old and damaged batteries are to be sold according to the weight and not per piece.
• Hence the Writ petition is allowed and directed to refund the penalty.