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Wrong destination is not a Ground for Imposing Penalty under GST

  • Jun 2, 2020 | Divita S Gupta

The High Court of Telangana has held that penalties imposed under GST laws cannot be levied on the grounds of ‘wrong destination’ and any action of collecting penalty under threat of detention of the vehicle carrying goods for such an absurd reason is arbitrary and violative of Articles 14, 265 and 300-A of the Constitution of India. The petitioner approached the High Court of Telangana after being detained at Jeedimetla while returning from Karnataka even though the petitioner was carrying all requisite documents. The petitioner was served a notice under Section 129 (3) of the CGST Act, 2017 alleging ‘wrong destination’ and imposed penalty accordingly. The petitioner further contended that the said collection of tax and penalty by the respondents is through coercion and threat despite carrying all documents. The High Court of Telangana observed that there were no valid reasons for the detention of the vehicle and the goods when the movement of the goods was inter-State in nature and the provisions of the SGST were not shown to have been violated. As such a litigant cannot be coerced by the Government to make a payment of duties on the grounds of wrong destination.

Avalara helps businesses of all sizes get GST return filing, e-way bill generation and e-invoicing right with cloud-based GST compliance solutions in India. Goods and Services Tax (GST) rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Divita S Gupta
Avalara Author Divita S Gupta
Divita has served as a writer and editor for top financial services organizations in India. She has written on topics like mutual funds, insurance, taxes, SME financing for globally recognized banking and financial organizations including ICICI, Aditya Birla Group, News Corp. With a Masters in Business Administration from Symbiosis International University, she currently owns a small business in Mumbai.

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