2024 (7) TMI 1104 - HC - GST

Taxpayer's Challenge Dismissed: Voluntary Penalty Payment and Procedural Delays Nullify Seizure Order Appeal Under CGST/SGST Act

The HC rejected the appellant's appeal against a CGST/SGST Act seizure order. Despite challenging the release of a consignment worth Rs. 58,21,206, the ... Maintainability of appeal - Appeal against order under CGST/SGST Act - adjudication on the refund application - HELD THAT:- At the time of seizure of the goods by the authorities under the CGST/SGST Act, there was an option for the appellant to either pay the amounts demanded and avoid an adjudication or to contest the seizure and insist on an adjudication order. For reasons best known to him, he chose to make the payment and consequently, Ext. P5 order was passed releasing the goods to him by making it clear that in view of the payment the authorities were not proceeding against him for determination of any tax and penalty. If the appellant had a case that the payment was a mistake, he should have preferred an application for a refund of the tax/penalty paid by him and sought for an adjudication on the refund application. The appellant is solely to blame. At this stage of the proceedings, where this appeal is filed more than 7 years after the release of the goods to the appellant, there are no reason to take a view different from that of the learned Single Judge, who in our view rightly dismissed the Writ Petition. The Writ Appeal fails and is accordingly dismissed. Issues:1. Appeal against order under CGST/SGST Act2. Delay in approaching the court3. Maintainability of the appeal4. Adjudication order requirement under Section 129Analysis:1. The appellant, a private limited company engaged in the jewellery business, had a consignment worth Rs. 58,21,206 intercepted by the respondents due to missing documents as per CGST/SGST Act. The items were seized, tax and penalty were determined, paid by the appellant, and goods were released. The appellant later appealed against the release order, citing a procedural error, which was rejected due to delay in filing the appeal.2. The learned Single Judge dismissed the Writ Petition on the grounds of no merit in the contentions raised and delay in approaching the court. The appellant's argument of erroneously filing an appeal against the release order instead of seeking an adjudication order without payment was not found valid.3. The appellant's counsel argued that the appeal against the release order was not maintainable as there was no formal adjudication by the authorities initially. However, the court disagreed, stating that the appellant had the option to contest the seizure and request an adjudication order but chose to pay the demanded amounts, leading to the release order. The court found the appellant solely responsible for the situation.4. The court emphasized that the appellant should have sought a refund of the paid tax/penalty and requested an adjudication on the refund application if the payment was deemed a mistake. Instead, the appellant appealed against the release order, which was in their favor, and then faced dismissal of the appeal. The court upheld the Single Judge's decision to dismiss the Writ Petition due to the appellant's delay in approaching the court, more than 7 years after the goods were released.In conclusion, the Writ Appeal was dismissed as the court found no reason to deviate from the Single Judge's decision, emphasizing the appellant's responsibility for the situation and the lack of merit in the appeal.