GST detention for misdescription and undervaluation upheld where procedural defects did not displace the core tax-evasion findings.

Material discrepancies in the description and valuation of goods intercepted in transit justified GST detention, tax demand, and penalty where the taxpayer failed to rebut the departmental assessment or show that the differences were harmless trade variations. The Calcutta HC held that unsigned or incomplete documentation did not vitiate the proceedings because the core findings of misdescription and undervaluation remained intact. On that factual basis, the inference of deliberate misrepresentation and intent to evade tax was sustained, and the challenge based on procedural defects and Article 19(1)(g) was rejected as GST enforcement to secure compliance and prevent evasion does not infringe the right to carry on trade.

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Issues: Whether detention of goods and the vehicle, the demand of tax and penalty under the GST laws, and the rejection of the challenge based on alleged procedural defects and Article 19(1)(g) were justified.

Analysis: The goods were intercepted during transit and the authorities found discrepancies between the declared descriptions and the physical verification report, along with a material difference in valuation. The Court held that the unsigned and incomplete documentation, though irregular, did not vitiate the proceedings when the core findings of misdescription and undervaluation remained intact. The Court further held that the petitioner failed to displace the authorities' valuation or establish that the discrepancies were mere harmless trade variations. On that basis, the inference of deliberate misrepresentation and intent to evade tax was sustained. The Court also held that regulatory action under the GST framework does not infringe the right to carry on trade and business when it is taken to secure compliance and prevent tax evasion.

Conclusion: The detention, tax demand, and penalty were upheld and the challenge was rejected.

Ratio Decidendi: In proceedings under the GST detention provisions, material discrepancies in description and valuation, coupled with failure of the taxpayer to rebut the departmental assessment, can sustain detention and penalty notwithstanding procedural irregularities that do not affect the core merits of the case.

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