# M/s. Pioneer Industries 485, Chhota Kaila, Scrap Market, PAC Chowk, Ghaziabad v. State of U.P. & Ors

- **Citation:** (2023) 2 ILRA 1081
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-01-25
- **Case number:** Writ Tax No. 62 of 2023
- **Bench:** Rajesh Bindal, C.J. J.J. Munir
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-pioneer-industries-485-chhota-kaila-scrap-market-pac-chowk-ghaziabad-v-49700
- **Pages:** 3

## Headnote

C.S.C., Sri Nimai Dass (Additional Chief
Standing Counsel), Sri Apurva Hajela
(Standing Counsel)

Uttar
Pradesh
Cinematograph
Rules,
1951-Claim of subsidiary grant after setting
up a cinema hall in rural area was rejected
and
recovery
notice
issued-impugnedPetitioner claim subsidiary grant as per
government scheme dated 21 July, 1986-
merely because Petitioner had moved an
application for grant of license within the
period specified will not entitle him of the
benefit when pre-requisites have not been
fulfilled-license is granted merely to run the
cinema hall-does not ipsofacto entitle to avail
the scheme-instead conditions laid down have
to be fulfilled.

W.P. dismissed. (E-9)

List of Cases cited:

## Text

2 All. M/s. Pioneer Industries 485, Chhota Kaila, Scrap Market, PAC Chowk, Ghaziabad Vs.
 State of U.P. & Ors.
1081
section(1) of Section 12, as even under
Section 12(1), the owner/operator shall not
be entitled to the full refund but shall be
entitled to the refund of an amount equal to
one-third of the rate of quarterly tax or one
twelfth of the yearly tax, as the case may
be, payable in respect of such vehicle for
each thirty days of such period for which
such tax has been paid. However, only in a
case, which falls under sub-section(2) of
Section 12 and subject to surrender of the
necessary documents as mentioned in subsection(2) of Section 12, the liability to pay
the tax shall not arise, otherwise the
liability
to
pay
the
tax
by
such
owner/operator shall continue." (emphasis
supplied)

5. In terms of Rule 18 of the Rules, the
petitioner had already filed objection
against the recovery citation on December
18, 2022 mentioning that possession of the
vehicle in question was taken by the
financer in May 2013. Subsequently, the
vehicle was sold by the financer. The
aforesaid objections are required to be
considered by the competent authority and
from the date of possession of the vehicle
was taken by the financer, the liability may
be re-worked out in terms of judgment of
Hon'ble the Supreme Court in Mahindra
and Mahindra Financial Services' case
(supra). However, for any period prior to
that, if the tax has not been paid, the
petitioner shall be liable to pay the same.

 6. The writ petition is, accordingly,
disposed of and recovery citation against
the petitioner is quashed.
----------
(2023) 2 ILRA 1081
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 25.01.2023

BEFORE
THE HON'BLE RAJESH BINDAL, C.J.
THE HON'BLE J.J. MUNIR, J.

Writ Tax No. 62 of 2023

M/s. Pioneer Industries 485, Chhota Kaila,
Scrap Market, PAC Chowk, Ghaziabad
 ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Praveen Kumar

Counsel for the Respondents:
Sri Ankur Agarwal (S.C.)

Civil Law - U.P. Goods and Services Tax
Act, 2017-Section 129 (1)(b)-Order passed
goods in transit seized- impugned-levy of
penalty u/s 129 (1)(b) not called for and not
justified-as it provides that where owner of the
goods comes forward for payment of penalty ,
the amount has to be two hundred percent of
the tax payable-but penalty has been levied to
the tune of hundred percent of the value of the
goods-impugned order set aside.

W.P. allowed. (E-9)

(Delivered by Hon'ble Rajesh Bindal, C.J.
&
Hon'ble J.J. Munir, J.)

1. The order passed on GST MOV-06
dated January 7, 2023, vide which the
goods in transit were seized by the
authorities concerned, has been impugned
in the present writ petition. Further show
cause notice on GST MOV-07 and order
passed thereon on GST MOV-09 dated
January 11, 2023 are under challenge in the
present petition.

2. Learned counsel for the petitioners
submitted that the goods were accompanied
by proper documents. The owners of the
goods either are the consignors or the
1082 INDIAN LAW REPORTS ALLAHABAD SERIES
consignees.
However,
still
without
appreciating the contentions raised by the
petitioners, vide impugned order, the driver
of the vehicle was deemed to be the owner
and penalty of ? 4,01,672/- has been levied
in exercise of power under Section
129(1)(b) of U.P. Goods and Services Tax
Act, 2017 (hereinafter referred to as 'the
Act').

3. The argument is that it is a case
in which the goods in transit were
accompanied by proper documents.
When show cause notice was issued to
the driver of the vehicle, the petitioners
had filed their replies. In terms of the
provisions of Section 129(1)(a) of the
Act, in case, the owner of the goods
comes forward, the penalty is to be
levied upon him. The penalty can be
levied under section 129(1)(b) of the
Act, only if the owner of the goods does
not come forward. In the case in hand,
vide impugned order the penalty has
been levied under Section 129(1)(b) of
the Act, which is not applicable. He has
also
referred
to
Circular
dated
December 31, 2018 issued by the
Central Board of Indirect Taxes and
Customs (hereinafter referred to as
'Board'), whereby a clarification has
been issued as to who is to be treated as
owner of the goods for the purpose of
Section 129(1) of the Act. It provides
that if the goods are accompanied with
invoices then consignor should be
deemed to be the owner. In the case in
hand, the petitioner nos. 1 and 2 are the
consignors, whereas petitioner nos. 3 to
5 are consignees, hence, in their
presence and accepting the ownership
of the goods, the impugned order
should not have been passed under
Section 129(1)(b) of the Act.

4. On the other hand, learned
counsel for the respondents submitted
that it is a case in which the goods were
not matching with the invoices as
certain goods were found either to be
more
or
less
than
the
quantity
mentioned in the invoices. Hence,
penalty has been appropriately levied.

5. After hearing learned counsel
for the parties, in our opinion, the
present writ petition deserves to be
allowed and the order impugned dated
January 11, 2023 deserves to be set
aside for the reason that the consignors
and
consignees
are
present
and
accepting ownership of the seized
goods. The consignors are registered
dealers in the State of U.P.

6. In view of the aforesaid fact and
also the clarification given by the Board
vide its Circular dated 31, 2018, in our
opinion, levy of penalty under Section
129(1)(b) of the Act was not called for
and could not be justified as Section
129(1)(a) of the Act provides that where
owner of the goods comes forward for
payment of penalty, the amount has to
be two hundred per cent of the tax
payable, whereas, in the case in hand,
the penalty has been levied to the tune
of hundred per cent of the value of the
goods.

7. For the reasons mentioned above,
the impugned order dated January 11,
2023 passed by respondent no. 2 is set
aside. The writ petition is allowed. The
matter is remitted back to the competent
authority for passing fresh order within a
period of two weeks from the date of
receipt of copy of the order.
----------
2 All. Rajendra Pratap Singh Vs. State of U.P. & Ors.
1083
(2023) 2 ILRA 1083
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 18.01.2023

BEFORE

THE HON'BLE RAJESH BINDAL, C.J.
THE HON'BLE J.J. MUNIR, J.

Writ Tax No. 194 of 2022

Rajendra Pratap Singh ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Shambhu Chopra (Sr. Advocate), Ms.
Mahima Jaiswal, Sri Rakesh Kumar Tripathi,
Ms. Anupama Tripathi

Counsel for the Respondents:
C.S.C., Sri Nimai Dass (Additional Chief
Standing Counsel), Sri Apurva Hajela
(Standing Counsel)

Uttar
Pradesh
Cinematograph
Rules,
1951-Claim of subsidiary grant after setting
up a cinema hall in rural area was rejected
and
recovery
notice
issued-impugnedPetitioner claim subsidiary grant as per
government scheme dated 21 July, 1986-
merely because Petitioner had moved an
application for grant of license within the
period specified will not entitle him of the
benefit when pre-requisites have not been
fulfilled-license is granted merely to run the
cinema hall-does not ipsofacto entitle to avail
the scheme-instead conditions laid down have
to be fulfilled.

W.P. dismissed. (E-9)

List of Cases cited:

1. Commissioner of Customs (Import), Mumbai
Vs M/s Dilip Kumar & Com. & ors. (2018)9 SCC
1

2. Sun Export Corporation. Vs Collector of
Customs (1997) 6 SCC 564
3. Kanai Lal Sur Vs Paramnidhi Sadhukhan, AIR
1957 SC 907

(Delivered by Hon'ble Rajesh Bindal, C.J.
&
Hon'ble J.J. Munir, J.)

1. The present writ petition has been
filed praying for quashing of an order dated
July 13, 2021 passed by the Joint Secretary,
State Tax Department, U.P., Annexure-1 to
the writ petition, vide which the claim of
the petitioner for providing subsidiary grant
after he had set up a cinema hall in rural
area was rejected. Further challenge has
been made to recovery notice dated August
24,
2021
issued
by
Assistant
Commissioner,
Trade
Tax,
Chandauli,
Anneuxre-27 to the writ petition. Further, a
direction has been sought to respondent
No.1 to provide subsidiary grant to the
petitioner with reference to the period
mentioned in the scheme dated July 21,
1986.

2. Mr. Shambhu Chopra, learned
Senior
Advocate
appearing
for
the
petitioner submitted that the Government
had come out with a scheme dated July 21,
1986 (hereinafter referred to as the
"Scheme") pertaining to setting up of new
permanent
cinema
halls.
Under
the
Scheme, such cinema halls, for first year,
were to be paid subsidiary grant equal to
100% of the amount of entertainment tax
payable with regard to the movie exhibited.
Thereafter, for second and third year they
were to be paid equal to 74% and 50% of
the entertainment tax, respectively. The
idea was to promote setting up of more
means of entertainment in the rural areas,
for which the Scheme was meant. One of
the clause of the Scheme provided that
benefit
will
be
available
to
any
entrepreneur, who applies for licence to run