2025 (2) TMI 1002 - HC - GST

Detention under Section 129 held unwarranted where invoices matched physical verification and no intent to evade tax

Ashok Sharma Versus The State of West Bengal & Ors.

HC held that detention under Section 129 was unwarranted: invoices broadly described the goods and departmental physical verification found quantities and ... Detention of vehicle - whether detention of goods, which were carried in a vehicle under the cover of three invoices, were different from the goods which were actually found in the vehicle during the course of inspection? - whether there was an intent to evade payment of tax? whether the appellant/writ petitioner was guilty of suppression of facts with a view to evade payment of tax? - HELD THAT:- There is no split up details as regards the nature of the goods, which were carried but the broad classification has been mentioned in the invoices. It is not in dispute that the quantity or the weight of the goods, which were carried in the vehicle, has been found to be correct by the department on physical verification and there is no discrepancy. Apart from that gross description of the product as contained in the invoices also does not show any change of product carried in the vehicle. The inspecting authority appears to have made a roving enquiry and went beyond the description of the goods as described in three invoices and has recorded information regarding the size of the pipe, shutter, TMT Bar which detail was not mentioned in the invoices. Therefore, the question of invoking Section 129 of the Act does not arise in the facts and circumstances of the case. It is not the case where procedures under Section 129 of the Act could have been drawn and the goods could have been detained and penalty could have been imposed. It may be a different matter if during the process of adjudication the authority has taken up the case with regard to classification of the products, which is not the case on facts. The authorities are directed to release the vehicle along with the goods within four days from the date of receipt of the server copy of this order - Application disposed off. The High Court of Calcutta issued a judgment in an intra-court appeal against an order related to goods detained in a vehicle under three invoices. The appellant sought a writ of mandamus to cancel various notices and orders related to tax demands and penalties. The court considered whether there was a discrepancy in the goods carried in the vehicle, an intent to evade tax, and suppression of facts by the appellant.The court examined the notices and found that while there was a broad classification of goods in the invoices, the quantity and weight of the goods in the vehicle matched the descriptions. The inspecting authority went beyond the invoice descriptions to note additional details like the size of specific items, but there was no evidence of a deliberate attempt to evade tax. The Harmonized System of Nomenclature (HSN) classifications of goods were identical, and the department did not dispute this fact. As a result, the court concluded that the detention of goods and imposition of penalties under Section 129 of the Act were not justified in this case.The court overturned the orders of the Appellate Authority and the Original Authority, setting aside the penalties imposed on the appellant. The appellant was granted the right to seek a refund of any predeposit made during the appeal process. The authorities were directed to release the vehicle and goods within four days of receiving the court's order. The appeal and related application were disposed of, and urgent copies of the order were to be provided to the parties' advocates.In summary, the court found that there was no basis for the detention of goods or the imposition of penalties due to the lack of evidence of tax evasion or discrepancies in the goods carried. The appellant's writ petition was allowed, and the impugned orders were set aside and quashed, with the appellant granted the opportunity to seek a refund of any predeposit. The authorities were instructed to release the vehicle and goods promptly.