2023 (1) TMI 1098 - HC - GST

Appellate Seeks Goods Release via Section 129(1)(a), Challenging GST Penalty and Seizure Regulations with Procedural Safeguards

HC of Calcutta reviewed a case involving goods seizure and penalty under GST regulations. The Court directed the appellant to file an application under ... Seeking release of confiscated goods - whether the authority was justified in holding that the appellant is not the owner of the goods? - HELD THAT:- The appeal is disposed off with a direction to the appellant to file an application before the Deputy Commissioner of State Tax, Goods and Services Tax, Bureau of Investigation, South Bengal, Durgapur zone seeking relief under Section 129(1) (a) of the said Act and such application shall be filed within one week from the date of receipt of the server copy of this judgment and order. On receipt of the said application, the said authority shall independently consider such a prayer uninfluenced by any of the observations made in its order dated 12th December, 2022, which is subject matter of the writ petition and such order shall be passed within a period of 10 days from the date on which the application is filed by the appellant. Appeal disposed off. Issues:Interpretation of ownership of goods under circular dated 31st December, 2018 by the Central Board of Indirect Taxes and Custom, GST Policy Wing; Consideration of Section 129(1) (a) of WBGST/CGST Act for release of goods; Application of penalty for discrepancies in documents accompanying goods.Analysis:The judgment of the High Court of Calcutta involved an intra-Court appeal against an order related to the seizure of goods and imposition of a penalty. The central issue revolved around the interpretation of ownership of goods as per a circular issued by the Central Board of Indirect Taxes and Custom, GST Policy Wing. The appellant argued that the order holding them not as the owner of the goods was illegal, citing clause no.6 of the circular which specifies conditions for determining ownership based on accompanying documents. The Deputy Commissioner of State Tax concluded that the appellant failed to provide sufficient document evidence to explain discrepancies, leading to the penalty imposition.The Court considered the appellant's submission regarding the circular and the lack of any rival claimant for the goods. It was emphasized that the correctness of the Deputy Commissioner's order would be reviewed in the pending writ petition post the submission of the affidavit-in-opposition. Additionally, the appellant sought relief under Section 129(1)(a) of the WBGST/CGST Act for the release of goods, highlighting their readiness to pay the security equivalent to the penalty. However, the Court noted that such a prayer should have been made before the relevant authority, which was a procedural requirement not fulfilled by the appellant.In its decision, the Court disposed of the appeal by directing the appellant to file an application seeking relief under Section 129(1)(a) of the Act within a week. The authority was instructed to independently consider the application without influence from previous observations within 10 days of its filing. The Court clarified that this action by the appellant did not affect their rights in the writ petition or the department's stance in the affidavit-in-opposition. No costs were awarded, and the parties were to receive a certified copy of the order promptly upon formalities' completion. The judgment was delivered by Hon'ble Mr. Justice T. S. Sivagnanam, with agreement from Hon'ble Mr. Justice Hiranmay Bhattacharyya.