2022 (2) TMI 1052 - HC - GST

Release of Detained Goods Valid After Dealer's Death: Wife's Payment of Tax and Partial Penalty Safeguards Revenue Interest Under Section 129 CGST Act

The HC dismissed an appeal against an interim order releasing detained goods and vehicles. The case involved a dispute over Section 129 of CGST Act ... Detention of goods alongwith the vehicle - demand of penalty at 200% of the tax as per Section 129 of the CGST Act, 2017 - respondent submits that the respondent's husband was a registered dealer under the GST Act and he had an untimely death and the respondent is taking steps to register herself as a dealer in the place of her husband and as on date she has stepped into the shoes of her husband - HELD THAT:- The technical objection raised by the appellant has to be agitated before the learned Single Judge as the appellant has been given an opportunity to file an affidavit-in-opposition. All that is required to be seen is whether the interest of revenue has been reasonably safeguarded. In our considered view, the respondent having paid the 100% of the admitted tax and further 10% of the disputed tax, the interest of revenue has been safeguarded, for the present. This order should not be treated as a precedent as this court has not interpreted the provisions of Section 129 of the Act and rendered this decision. The decision is based on facts after noting that the respondent is the wife of the deceased dealer and also that she is yet to be formally recognized as a dealer by substituting her name in the Registration Certificate for which specified procedure has to be followed. Therefore, this order shall not be treated as laying down a legal principle or treated as a precedent. Appeal dismissed. Issues:Challenging detention order of goods, interpretation of Section 129 of CGST Act, liability of legal representatives in case of death of registered dealer.Analysis:The appeal before the Calcutta High Court challenged the detention order of goods issued by the authority against two trucks containing a consignment of steel and other products. The order in question was an interim order by a Single Judge directing the release of the goods and the vehicle. The Single Judge based the decision on the fact that the appellant, the wife of the deceased dealer, had paid 100% of the disputed tax and 10% of the disputed tax. The Single Judge also noted that the GST Tribunal was non-functional at that time, affecting the appellant's ability to appeal effectively.The State contended that under Section 129 of the CGST Act, 2017, the penalty should be 200% of the tax, and since the appellant was not a registered dealer, further steps to recover the balance were not permissible. The respondent, representing the deceased dealer, argued that she was in the process of registering herself as a dealer in place of her husband, as allowed under Section 93 of the W.B.GST Act, 2017.The High Court held that technical objections raised by the appellant should be addressed before the Single Judge, as the interest of revenue seemed reasonably safeguarded by the appellant's payments. The Court emphasized that the decision should not be considered a legal precedent, as it was based on specific facts, including the appellant's status as the wife of the deceased dealer and her pending formal recognition as a dealer.Consequently, the High Court dismissed the appeal and directed the appellant to comply with the Single Judge's order by a specified date. Both parties were granted the liberty to raise issues and file necessary documents in the writ petition, maintaining the opportunity for further legal proceedings.