TaxTMI 
TaxTMI 
2020 (3) TMI 1125
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....were brought within the jurisdiction of Kerala from Karnataka manufacturing Plant and the vehicles carrying the aforementioned goods were intercepted in Walayar, Palakkad on the premise that the aforementioned goods were wrongly classified, in fact they would be falling under the head 2202 10, for which the GST rate is 28%. Against the aforementioned detention, the petitioner vide reply to Ext.P3(d) notice submitted that, the allegation of misclassification is without merit, and petitioner has already applied for an advanced ruling pertaining to same matter in Gujarat and the said matter is pending in the Hon'ble High Court of Gujarat is with an interim stay favouring petitioner. It is in this back ground, the action of the authorities in detaining goods has been assailed in the present writ petition. Counsel for the petitioner in view of the aforementioned facts, challenged the action by raising following submissions: a. The GST authorities in Kerala do not have jurisdiction to issue show cause notice of the tax on import as only the officers in the Karnataka could initiate the proceedings. At the best the authorities at Kerala have a remedy of sending an intimation to the ....
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....r officer to detain the vehicle along with goods transported. 4. Learned counsel for the petitioner in rebuttal submitted that any ambiguity with respect to classification of products has to be resolved in favour of assessee. In support of the above contention petitioner relied upon 2018 judgment of Hon'ble Allahabad High Court in Commissioner of Commercial Tax vs. Racket Backizer India Ltd. [2018 (19) GSTL 596 (All.)] , which followed the decision of the Hon'ble Supreme Court in Voltas Ltd. v. State of Gujarat [(2015) 7 SCC 527], which laid down the same principle as reiterated by the Hon'ble Allahabad High Court. Hence, the levy of penalty arising from ambiguity in classification is arbitrary and illegal, thereupon making the demand for penalty illegal. 5. I have heard the learned counsel for the parties and apprised the paper book. The facts as narrated above with regard to the transit of goods from Karnataka to Kerala, reflecting the payment of Goods Service Tax as 12% in categorizing drink under the code 2202 99 20 are not in dispute. The only point to be pondered is whether the Officers of Kerala would have a jurisdiction to detain and seize the goods or at th....
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....roceedings in respect of the notice specified in sub-section (3) shall be deemed to be concluded. (6) Where the person transporting any goods or the owner of the goods fails to pay the amount of tax and penalty as provided in sub-section (1) within 1 [fourteen days] of such detention or seizure, further proceedings shall be initiated in accordance with the provisions of section 130: PROVIDED that where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the said period of 1 [fourteen days] may be reduced by the proper officer." 6. On a perusal of the aforementioned Act, it is evident that Section 129 opens with a non obstante clause empowering the Officers to detain and seize the goods, if it found to be in contravention of any of the any of the provisions of the Act and release of the vehicles, as per the conditions, enumerated, therein. A similar question also arose for consideration before the Division Bench of the Gujarat High Court in Synergy Fertichem Pvt. Ltd.'s case (Supra) wherein paragraph 158 and 159 and 160 held as under: "158. In many matters of the present type,we have noticed tha....
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....s on to lay down the procedure. If any person transports or stores any goods "contravening this Act" or its rules, all those goods and means of transport and documents relating to those goods and conveyance will be detained or seized. They will, however, be released to the owner of the goods (a) on its paying the applicable tax and penalty equal to one hundred percent of the tax payable on the goods. If the goods belong to an exempted category, a different rate applies, though. 27. The Revenue asserts that there is "contravention", and that contravention concerns misbranding the product and paying less tax. Under the erstwhile Kerala Value Added Tax Act, the first petitioner and those trading in the same product-- betel nut--have had many rounds of litigation, Eventually, as seen from the Exts.P1 to P5 proceedings, this Court and the Revenue accepted that the product is not supari and it attracts lesser tax. The Exts.P6, P6(a), P7, and P7(a) are the first petitioner's purchase and supply invoices. 28. The Exts.P8 and P8(a) are important; they are the first petitioner's recent GST returns for June and August, 2018. In those returns, the first petitioner has assigned th....
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....nthetics Limited, we will examine what amounts to statutory violation or contravention under Section 129 of the Act. Apt is the case decided by this Court: Rams v. Sales Tax Officer. The petitioner in Rams contracted with the Government of India to print and supply a large number of telephone directories. For this purpose, he procured paper from the Tamil Nadu government agency. When the paper was under transport, at Kochi a sales tax officer detained the lorry, under Section 29A(2) of the Kerala General Sales Tax Act, 1963. 33. The detention was because the petitioner, an unregistered dealer, had allegedly attempted to evade the sales tax. The petitioner's producing all the documents had no impact. Instead, the detaining officer insisted on the petitioner's furnishing bank guarantee for certain sum as a condition for release of the goods, pending enquiry. 34. The order in enquiry affirmed that the Enquiry Officer was "satisfied" that there was attempt at evasion of tax. So the penalty followed. In this context, a learned Single Judge of this Court has observed that when there is scope for a genuine dispute regarding any liability for tax, the question of detaining th....
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....n Rams that the process of detention of the goods cannot be resorted to when the dispute is bona fide, especially, concerning the exigibility of tax and, more particularly, the rate of that tax." 160. We are in full agreement with the aforesaid enunciation of law laid down by the Kerala High Court. Thus, in a case of a bona fide dispute with regard to the classification between the transporter of the goods and the Squad Officer, the Squad Officer may intercept the goods, detain them for the purpose of preparing the relevant papers for effective transmission to the jurisdictional Assessing Officer. It is not open to the Squad Officer to detain the goods beyond a reasonable period. The process can, at best, take a few hours. It goes without saying that the person, who is in charge of transportation, will have to necessarily cooperate with the Squad Officer for preparing the relevant papers. [See Jeyyam Global Foods (P.) Ltd. vs. Union of India & Ors., (2019) 64 GSTR 129 (Mad.)- 2019-VIL-47-MAD] 7. From the perusal of the aforementioned findings, it is irresistibly concluded that in case of a bonafide dispute with regard to the classification between a transitor of the goods and ....