Allahabad HC Quashes GST Penalty; Officer Ordered Three Months’ Training for Ignorance of GST Provisions

Allahabad HC Quashes GST Penalty; Officer Ordered Three Months’ Training for Ignorance of GST Provisions

M/S MLV Constructions (petitioner) approached the Lucknow Bench of the Allahabad High Court, comprising Justice Sangeeta Chandra and Justice Brij Raj Singh, challenging a GST order. The High Court quashed the GST penalty order. It noted that the SGST Assistant Commissioner, Ramesh Kumar, was unable to read or explain the provisions of the GST Act in court, even though he had earlier issued a penalty order against the company.

The case started when the company, M/S MLV Constructions, transported its machinery from Rajasthan to Bihar. The company possessed a valid e-way bill for legal transportation, which was scheduled to expire on June 19, 2025. The department confiscated the vehicle on June 21, 2025, in Lucknow.

Thereafter, the tax department imposed a penalty after sending notices only to the driver and transporter, instead of issuing them to the actual sender or receiver of the goods, as required under Section 129(1)(a) of the CGST Act.

The company found this penalty order to be unfair and in contravention of Section 129(3), which says a proper opportunity to be heard should be given before the issuance of a final order. Considering this, the Allahabad High Court quashed the GST penalty order and remanded the case to the department for fresh consideration and issued a proper show cause notice (SCN) to the company via registered post, SMS, and email, and thereafter issued the final order considering the speakings of company.

Also, the court scolded the officer for not being properly aware of the GST rules and ordered him to attend three months of training.

Citation: M/S MLV Constructions Vs. State of U.P.; Writ Tax No. 752 of 2025; 21/08/2025; Allahabad High Court