Goods Released After Deceased Dealer's Wife Paid Full Tax and Partial Penalty Under Section 129 of CGST Act

The HC dismissed the State's appeal against an order releasing detained goods (two trucks of steel products) belonging to the deceased dealer's wife. The Court upheld the Single Judge's order as the respondent had paid 100% of the disputed tax and 10% of the penalty, adequately protecting revenue interests. The Court noted that while Section 129 of CGST Act prescribes a 200% penalty, technical objections should be addressed by the Single Judge. The respondent was in process of registering herself as a dealer under Section 93 of W.B.GST Act, which addresses liability of legal representatives. The decision was specific to these facts and not to be treated as precedent.

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Issues:
Challenge to detention order of goods, application of Section 129 of the CGST Act, 2017, liability of legal representatives in case of death of a registered dealer.

Analysis:
The High Court of Calcutta heard an appeal filed by the State against an order in a writ petition involving the detention of goods belonging to the wife of a deceased registered dealer. The detained goods were two trucks containing steel and other products. The interim order issued by the Single Judge directed the release of the goods as the appellant, the wife of the deceased dealer, had paid 100% of the disputed tax and 10% of the disputed tax. The Court noted that the GST Tribunal was not functional, and if the appellant had the avenue of appeal, she would have been required to pay a certain amount for her appeal to be entertained.

The State contended that under Section 129 of the CGST Act, 2017, the penalty would be 200% of the tax, and as the appellant was not a registered dealer, the revenue could not recover the balance without further security measures. The respondent, representing the deceased dealer, was in the process of registering herself as a dealer in place of her husband, as per Section 93 of the W.B.GST Act, 2017, which addresses the liability of legal representatives in case of a registered dealer's death.

The Court held that technical objections raised by the appellant should be addressed before the Single Judge, ensuring the interest of revenue is safeguarded. Since the respondent had paid the required taxes, the revenue's interest was considered protected for the time being. The Court clarified that the decision should not be treated as a legal precedent, as it was based on specific facts, including the respondent's status as the deceased dealer's wife and her pending formal recognition as a dealer.

Consequently, the appeal and connected application were dismissed, directing 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.

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