The Goods and Services Tax Appellate Tribunal (GSTAT), Agra State Bench, has summarily dismissed a departmental appeal challenging only the fine component of an appellate order, noting that the Revenue had not challenged the findings concerning the accompanying penalty.
The dispute arose from a GST search following which the proper officer imposed a penalty of ₹95,480 and a fine of ₹50,000, totalling ₹1,45,480, on the respondent firm.
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The Bench comprising Ajeet Singh (Judicial Member) and Vivek Kumar (Technical Member) questioned how an appeal confined to the fine could be entertained when the department had left the first appellate authority’s findings on the penalty unchallenged.
The proceedings concerned Mansi Udhyog, a firm located in Kaimganj, Uttar Pradesh. According to the Tribunal’s order, a search was conducted under Section 67 of the Central Goods and Services Tax Act and the Uttar Pradesh Goods and Services Tax Act.
Following the search, the proper officer imposed the fine and penalty by invoking Section 130(2) read with Section 122of the CGST/UPGST Acts.
The firm challenged the action before the first appellate authority. As recorded by the Tribunal, that authority held that although the department could initiate proceedings under Sections 73 or 74 in a search case, levying or collecting the fine and penalty by invoking Sections 130(2) and 122 was not sustainable.
The Tribunal’s brief order does not disclose the underlying search findings or elaborate on the factual basis for the original levy.
The department approached the Tribunal through a second appeal under Section 112 of the CGST/UPGST Acts. However, it restricted its challenge to the ₹50,000 fine, without contesting the first appellate authority’s findings concerning the ₹95,480 penalty.
At the admission hearing, Mukesh Kumar, authorised representative, appeared for the appellant State. Advocate Saket Bindal appeared for the respondent and accepted notice.
The Bench heard both representatives and examined the grounds of appeal and the accompanying documents.
The limited scope of the departmental appeal became decisive.
The Tribunal observed that it was unable to understand how the appeal could be entertained concerning the fine when the department had not challenged the first appellate authority’s findings relating to the penalty.
On that basis, the Bench summarily dismissed the Revenue’s second appeal at the admission stage under Section 112. It also directed that the order be communicated to all concerned in accordance with law.
Consequently, the first appellate authority’s order remained undisturbed in these proceedings, and the department’s attempt to restore the ₹50,000 fine failed.
The central feature of the ruling is the Tribunal’s treatment of the department’s restricted challenge. Its stated reason for dismissal was that the Revenue contested the fine while leaving the related findings on the penalty unchallenged.
The first appellate authority’s observations regarding proceedings under Sections 73 and 74, and the sustainability of the fine and penalty under Sections 130(2) and 122, form part of the background recorded by the Tribunal.
However, the Tribunal did not separately undertake a detailed examination of the statutory conditions governing those provisions. The order therefore concerns the scope of this departmental appeal and should not be read as a comprehensive ruling prohibiting every exercise of confiscation or penalty powers following a GST search.
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