Confiscation Order quashed and reduced penalty from Rs. 19 Cr. to Rs. 10,000 under CGST Act

Last updated: 07 January 2021

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Quick Summary

The Allahabad High Court has overturned a confiscation order for goods valued at over £107 crore and significantly reduced a penalty from nearly £19.5 crore to just £10,000. The original penalty was imposed for alleged duty evasion and failure to maintain proper GST records. The court found that the confiscation was arbitrary and illegal, as there was no evidence of intent to evade tax, a key requirement for such action. Furthermore, the penalty was reduced as the primary offence related solely to the non-maintenance of records, not tax evasion.

Court :
Allahabad High Court

Brief :
The Hon'ble Allahabad High Court in M/S Metenere Ltd. v. Union of India and another[Writ Tax No. 360 of 2020 dated December 17, 2020] quashed the order of confiscation of 12,979 metric tonnes of stock, passed by the Additional Commissioner, GST & Central Excise, alleging duty evasion and reduced the penalty from INR 19,43,89,804/- to INR 10,000/- under Section 122(1) of the Central Goods and Service Tax ("CGST Act") as the dispute pertained to non-maintenance of records.

Citation :
Writ Tax No. 360 of 2020 dated December 17, 2020

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