2022 (6) TMI 196 - HC - GST

Detention Under GST: Court Rejects Appeal Seeking Release of Goods at 50% Value Under Amended Section 129(1)

Hemraj Jain & Another Versus State Tax Officer, Bureau of Investigation and others

Hemraj Jain & Another Versus State Tax Officer, Bureau of Investigation and others - TMI Issues:Interpretation of Section 129 (1)(a) (b) of the West Bengal Goods and Service Tax Act, 2017; Ownership of the goods and applicability of penalties; Jurisdiction of the respondent-authorities in charging penalties; Detention of vehicles and goods by the Bureau of Investigation; Scope of interference with the impugned order of the learned single Judge; Adjudication of factual disputes and legal questions regarding the Acts; Dismissal of MAT 40 of 2022 along with CAN 1 of 2022.Interpretation of Section 129 (1)(a) (b) of the West Bengal Goods and Service Tax Act, 2017:The appellants argued that the learned single Judge should have granted an interim order for the release of the petitioners' vehicle upon payment of 50% of the value of the goods or 200% tax payable, whichever is higher, as per the amended Section 129 (1)(a) (b) of the Act. They contended that the penalty charged should not exceed this limit, even if the owner of the goods does not come forward for payment. The respondent-authorities, however, insisted on payment of 100% of the value of the goods, which the appellants deemed as a transgression of jurisdiction under the Act.Ownership of the goods and applicability of penalties:The petitioners claimed ownership of the goods by submitting sufficient documents to raise a prima facie presumption. Despite this, the respondent-authorities questioned the existence and veracity of the petitioners. The appellants relied on a previous judgment for the release of goods based on the amended provision of Section 129 (1) of the Act. The respondent-authorities argued that penalties could be charged up to 100% of the value of goods, considering contraventions of both State and Central Acts.Jurisdiction of the respondent-authorities in charging penalties:The respondent-authorities defended their actions by stating that the penalty imposition was justified under both the State and Central Acts. They clarified the methodology of penalty calculation in the impugned order, emphasizing that the Bureau of Investigation, responsible for the detention of the vehicles and goods, was not bound by the restrictions of Section 129 of the Act.Detention of vehicles and goods by the Bureau of Investigation:The detention of the vehicles and goods was carried out by the Bureau of Investigation, which was argued to have a different jurisdiction compared to the assessing authority under the Act. This distinction was highlighted to justify the penalty imposition and detention of goods.Scope of interference with the impugned order of the learned single Judge:The High Court concluded that there was no basis for interference with the impugned order of the learned single Judge at that stage. The Court refrained from delving into factual disputes regarding ownership authenticity and the legal question of Acts' applicability, stating that such adjudication fell within the first Court's jurisdiction.Adjudication of factual disputes and legal questions regarding the Acts:The Court highlighted that the resolution of factual disputes and legal questions concerning the Acts should be addressed by the learned single Judge during the writ petition's adjudication. The Court dismissed the appeal against the interlocutory order, emphasizing that the learned single Judge should decide all relevant questions without influence from the current observations.Dismissal of MAT 40 of 2022 along with CAN 1 of 2022:The Court dismissed MAT 40 of 2022 along with CAN 1 of 2022, clarifying that they had not delved into the merits of the parties' contentions. The learned single Judge was urged to expedite the decision on the writ petition to address the appellants' urgency due to ongoing losses from the detention of the vehicle and goods. No costs were awarded in the judgment.