2024 (7) TMI 1162 - HC - GST

Tax Authorities Win Challenge: Section 130 Seizure Order Reinstated After Appellate Order Found Legally Deficient

State of U.P. And Another Versus S/S B.P.T. Marketing And Another

HC allowed the writ petition challenging an appellate order related to goods interception under CGST Act. The court found the appellate authority's order ... Challenge to assessment order - part -B of the e- way bill was not duly filled - respondent did not submit any reply to the SCN - HELD THAT:- It is not in dispute that the goods in question was intercepted and same was detained on the ground that the e-way bill was not duly filled as required under the Act and after giving due notice to the respondent, the order was passed specifically mentioning therein that there was an intent to avoid the payment of tax. Once the authorities have recorded a finding of fact that there was an intent to avoid the payment of tax, the appellate authority was duty bound to reverse the said finding of fact but only a reference of the judgment passed by this Court in the case of M/S RAJ IRON & BUILDING MATERIALS VERSUS UNION OF INDIA THRU' ITS SECY. & 3 OTHERS [2018 (1) TMI 949 - ALLAHABAD HIGH COURT] has been given while allowing the appeal, thus, the appellate authority had failed to record any cogent reason as to how the said judgement was applicable in the facts of the present case. The appellate authority has neither recorded any specific finding of fact in order to reverse the finding that there was no intent to avoid the payment of tax, nor recorded any reason that the said case law relied upon was applicable in the facts of the present case. In such circumstance, the impugned order cannot be sustained in the eyes of law. Petition allowed. Issues:1. Quashing of orders passed by the 1st Appellate Authority.2. Restoration of the order passed by the seizing authority under Section 130 of the CGST Act.Analysis:1. The petitioner sought a writ to quash the orders passed by the 1st Appellate Authority. The goods were intercepted due to non-compliance with prescribed documents under the Act. The petitioner argued that despite issuing a show cause notice and finding intent to avoid tax payment, the respondent did not reply. The detaining authority passed an order under Section 130 of the Act based on this. The respondent appealed, and the impugned order was allowed without reversing the finding of fact regarding tax avoidance intent. The petitioner contended that the impugned order did not consider the specific finding of intent to avoid tax, making it unsustainable. The petitioner's plea was to allow the petition.2. The Court acknowledged the interception of goods due to incomplete e-way bill filing and the subsequent order stating the intent to avoid tax after providing notice to the respondent. The appellate authority failed to reverse the finding of tax avoidance intent and merely referenced a previous judgment without explaining its applicability to the current case. The appellate authority did not provide any cogent reason for applying the judgment or reversing the finding. Consequently, the impugned order lacked legal merit and could not be upheld. As a result, the writ petition was allowed, and the order dated 26.4.2019 was quashed.