2020 (2) TMI 1187 - HC - GST

Tax Discrepancies Lead to Appeal: Interpretation of Government Order on Ownership Rights

The Court noted discrepancies in tax imposition under Sections 129(1)(a) and 129(1)(b) of the GST Act, leading to confusion and subsequent appeal. The ... Release of goods alongwith the vehicle - Section 129(1)(a) of the GST Act - an Appeal under Section 107 (1) of the Act was filed - HELD THAT:- When, however, the Appellate Court instead of adjudicating as to whether the amount was payable under Section 129 (1) (a) or under Section 129 (1) (b) adjudicated on different aspects as well on 28.1.2020, the petitioner has filed the instant petition under the Article 226 of the Constitution of India - Learned counsel for the petitioner further submitted that under Section 168 of the U.P. GST Act, 2017, a certain Government Order had also been issued on 1.7.2017 (annexed as annexure no. 6 to the writ petition) which states that when the invoice is there it would be deemed that the person from whose possession the invoice is found would the owner and when the invoice came from the petitioner, it shall be deemed to be the owner. Matter requires consideration - However, if the petitioner deposits the amount as is payable under Section 129(1)(a) of the GST Act, the goods and the vehicle shall be released. Issues:Interpretation of Sections 129(1)(a) and 129(1)(b) of the GST Act; Adjudication by the Appellate Court on different aspects; Validity of Government Order under Section 168 of the U.P. GST Act, 2017.Interpretation of Sections 129(1)(a) and 129(1)(b) of the GST Act:The petitioner contended that after the interception of goods, they sought to release the goods by paying the tax under Section 129(1)(a) of the GST Act. However, the authorities imposed tax under Section 129(1)(b) instead. Consequently, an appeal was filed under Section 107(1) of the Act. The Court noted the discrepancy in the tax imposition and the subsequent appeal, highlighting the confusion between the two provisions.Adjudication by the Appellate Court on different aspects:The Appellate Court, instead of focusing solely on determining the tax liability under Section 129(1)(a) or 129(1)(b) of the Act, delved into other aspects during adjudication on a later date. This deviation from the specific issue raised by the petitioner prompted the filing of the instant petition under Article 226 of the Constitution of India. The Court acknowledged this departure from the core issue and deemed the matter in need of consideration.Validity of Government Order under Section 168 of the U.P. GST Act, 2017:The petitioner's counsel referenced a Government Order issued under Section 168 of the U.P. GST Act, 2017, dated 1.7.2017, which established that the possession of an invoice deems ownership. The counsel argued that based on this order, ownership should be attributed to the petitioner since the invoice originated from them. This argument introduces the aspect of legal interpretation and application of the Government Order in determining ownership rights.The Court directed the Standing Counsel to file a counter affidavit within three weeks and allowed for a rejoinder affidavit within two weeks thereafter. Additionally, the Court stated that upon the petitioner's payment of the amount under Section 129(1)(a) of the GST Act, the goods and the vehicle would be released. The judgment reflects a nuanced analysis of the conflicting interpretations of the GST Act provisions, the deviation in adjudication by the Appellate Court, and the relevance of the Government Order in establishing ownership rights.