2023 (10) TMI 583 - HC - GST

Court Quashes Tax and Penalty Orders, Citing Excessive Seizure Powers; Orders Refund Due to Lack of GST Tribunal.

M/s Sahib Furniture Thru Proprietor Kuldeep Kaur Versus State Of U.P. Thru Secy. Institutional Finance Lko And Ors.

M/s Sahib Furniture Thru Proprietor Kuldeep Kaur Versus State Of U.P. Thru Secy. Institutional Finance Lko And Ors. - 2023 (78) G. S. T. L. 481 (All.) Issues involved:The issues involved in this case are the liability of the petitioner to pay tax on the value of goods, imposition of penalty, validity of the order passed under Section 129(3) of the UPGST Act, and the necessity of constituting the tribunal under the GST Act.Liability to Pay Tax and Penalty:The petitioner challenged the order holding them liable to pay tax on goods assessed at Rs. 9,70,000, with a quantified tax amount and penalty. The appellate order dismissing the petitioner's appeal was also contested. The detention of goods was based on the absence of the TDF-01 form for interstate transportation, lack of a GST number for the recipient, and discrepancies between physically verified goods and the invoice. The petitioner argued that the goods were liable for tax under IGST or CGST, questioning the authorities' actions under Section 129 (1) of the UPGST Act. The Court found that the powers of seizure were exceeded and quashed the orders imposing tax and penalty.Constitution of Tribunal under GST Act:The Court entertained the writ petition due to the non-constitution of the tribunal under the GST Act. Despite the exchange of pleadings between the parties, the matter was heard finally as the tribunal remained unconstituted. The absence of the tribunal was a significant factor in the Court's decision-making process.Validity of Order under Section 129(3) of UPGST Act:The order passed under Section 129(3) of the UPGST Act was scrutinized, revealing that the goods were intercepted during transportation from Ludhiana to Kolkata. The detention was based on the lack of the TDS-01 form, discrepancies in the quantity of goods, and suspicions regarding the recipient institution. The Court considered the petitioner's defense, citing Section 68 of the UPGST Act, and concluded that the authorities had exceeded their powers of seizure. The Court referenced previous judgments to support its decision.Return of Deposited Amount:The writ petition was allowed, directing the respondents to return the amount deposited by the petitioner within two months from the date of the order. The Court quashed the impugned orders dated 27.12.2017 and 23.11.2008, emphasizing the importance of compliance with legal procedures and precedents in tax matters.