2020 (9) TMI 984 - HC - GST

Court orders counter affidavit, permits rejoinder, conditions release of goods upon tax deposit and security.

The Court directed the respondents to file a counter affidavit within six weeks in response to the petitioner's claims regarding the validity of tax ... Liability under Section 129(1)(a) of the Central Goods and Service Tax Act, 2017 - liability under Section 129(1)(b) of the Central Goods and Service Tax Act, 2017 - detention and interim release of goods on deposit and security - remedy under the GST appellate scheme where Tribunal not constitutedDetention and interim release of goods on deposit and security - liability under Section 129(1)(a) of the Central Goods and Service Tax Act, 2017 - Interim release of the detained goods subject to deposit of disputed tax and penalty under Section 129(1)(a) and furnishing of security for the remaining amount. - HELD THAT: - The Court recorded the petitioner's assertion that valid tax invoice and e-way bill existed and observed that, on the material before it, the petitioner's liability could, at best, be under the head of confiscation/liability contemplated by Section 129(1)(a) rather than conversion to the case under Section 129(1)(b). Taking into account the absence of a constituted GST Tribunal and the pendency of consideration on merits, the Court directed that if the petitioner deposits the disputed amount of tax and penalty corresponding to Section 129(1)(a) and furnishes security for the remainder found due, the detained goods shall be released pending final adjudication. The Court also permitted filing of counter and rejoinder affidavits for adjudication on merits.Detained goods to be released on deposit of the disputed tax and penalty under Section 129(1)(a) and on furnishing security for the remaining amount, subject to final outcome.Liability under Section 129(1)(b) of the Central Goods and Service Tax Act, 2017 - remedy under the GST appellate scheme where Tribunal not constituted - Whether the case should be treated as falling under Section 129(1)(b) was not finally adjudicated and requires fresh consideration. - HELD THAT: - The Court declined to decide the substantive question raised by the petitioner that the presence of certain loose invoices should not convert the liability into one under Section 129(1)(b). The matter was left for adjudication after the respondents file a counter affidavit and the petitioner files any rejoinder, reflecting that the question of conversion to Section 129(1)(b) is remitted for determination on the merits rather than disposed of at the interim stage. The Court noted the petitioner retains statutory remedies under the GST appellate scheme but proceeded suo motu because the GST Tribunal has not been constituted.Substantive dispute as to applicability of Section 129(1)(b) is remanded for consideration after filing of affidavits; no final determination made at this stage.Final Conclusion: Interim relief granted: detained goods ordered released on deposit of tax and penalty attributable to Section 129(1)(a) and on furnishing security for the balance; substantive issue whether liability falls under Section 129(1)(b) is left for fresh adjudication after exchange of affidavits. Issues: Validity of tax invoice and e-way bill, liability under Section 129(1)(a) vs. 129(1)(b) of the Central Goods and Service Tax Act, 2017, absence of GST Tribunal, consideration of loose invoices in determining liability.Analysis:The judgment delivered by Hon'ble Ashwani Kumar Mishra, J., pertains to a case involving a registered dealer engaged in trading ready-made garments. The petitioner asserts that the detained goods are accompanied by valid tax invoices and e-way bills, suggesting potential liability under Section 129(1)(a) of the CGST Act, 2017, for tax and penalty. However, the petitioner argues against converting this liability to one under Section 129(1)(b) of the Act merely based on the discovery of loose invoices alongside. The absence of a GST Tribunal prompts the petitioner to seek redress through this petition.The Court acknowledges the need for a thorough examination of the matter, indicating that the issue requires consideration. The learned standing counsel representing the respondents accepts the notice on their behalf. The Court directs all respondents to file a counter affidavit within six weeks, allowing for a comprehensive response to the petitioner's claims. Furthermore, the Court permits the filing of a rejoinder affidavit within two weeks following the submission of counter affidavits.In a conditional directive, the Court outlines that upon the petitioner's deposit of the disputed tax and penalty amount under Section 129(1)(a) and provision of security for any remaining due amount as per the Appellate Authority's order, the detained goods will be released to the petitioner. This release is subject to the final outcome of the ongoing petition, emphasizing the importance of compliance with the specified conditions for the resolution of the matter at hand.