TaxTMI 
TaxTMI 
2019 (11) TMI 1512
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....ned order has calculated the tax amount at Rs. 70,454/- and penalty amount at Rs. 70,454/- totalling to Rs. 1,40,908/- which stands deposited by the appellant on 18-5-2018 vide CPIN No. 18050200001644. 2. However, in the present appeal case, the appellant submitted the original copy of impugned order along with appeal document instead of certified copy of order. In the meantime M/s. Asha Cargo Movers Pvt. Ltd., Delhi an appellant whose case was similar nature filed an appeal before the Hon'ble Punjab and Haryana High Court. Hence the case was kept pending till the decision of this case. But as per direction by the Hon'ble High Court in the case of titled as M/s. Asha Cargo Movers Pvt. Ltd., Delhi v. State of Haryana, CWP 31699 of 2018 decided vide order dated 24-7-2019, the orders were against the department, since the original copy of order is already available with the appeal document, so this case is taken up for hearing on merit after affording proper opportunity of being heard to the appellant. Both the sides have been heard in detail. 3. The impugned order dated 4-5-2018 was communicated to the appellant on 4-5-2018 and the present appeal has been preferred on....
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....otice. The Proper Officer passed the impugned order dated 4-5-2018 creating demand of Rs. 1,40,908/- comprising tax of Rs. 70,454/- and penalty of Rs. 70,454/- under Section 20 of the IGST Act read with Section 129(1)(a) of the HGST/CGST Acts, which is the subject matter of present appeal. 5. Sh. Chetan Jain, Advocate for the appellant has assailed the impugned order on the following grounds :- (A) That the order passed by the Proper Officer is arbitrary in nature and the tax and penalty has been imposed without going into the merits of the case. (B) That the order of demand of Tax and Penalty passed by the Proper Officer is defective as the said order has been passed in the name of the transporter i.e. Nalagarh Truck Operator Union Nalagarh HP, person-in-charge of the conveyance being Sh. Gurpal Singh whereas it is crystal clear that both parts of E-way Bill i.e. Part-A and Part-B was filled in by the Consignor Company M/s. HUL Ltd. HP (Baddi). Thereafter, the interception of the goods notice in FORM GST MOV-07 was served on the person-in-charge of the Conveyance/ Vehicle Goods i.e. Mr. Harminder Singh, who is the conce....
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....e in a Vehicle No. UP 13 AT 1153 on 4-5-2018. While movement of the vehicle and when the vehicle crossed Yamuna Express Way it was intercepted by the respondent No. 3 Assistant Commissioner, State Tax, Mobile Squad, Unit-II, Noida at 01:30 a.m. on 5-5-2018 solely on the ground that the goods were not accompanied with E-way bill. The respondent No. 3 has proceeded for inspection/physical verification of the goods and for the same he has issued verification report in part-A and part-B on 5-5-2018 itself wherein no time has been mentioned. When the proprietor of the petitioner's firm has received the information about interception of the vehicle, he has immediately generated E-way Bill on 5-5-2018 at 11:55 AM. The submission of the appellant counsel for the petitioner was that though the petitioner has furnished the E-way bill before the respondent No. 3 prior to the seizure proceedings and seizure order, but the respondent No. 3 has passed the seizure order. Again without mentioning the time of passing the seizure order a consequential notice under Section 1....
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....ance is placed on the judgment of Kerala High Court in the case of M/s. Indus Towers Limited v. The Assistant State Tax Officer and State Tax Officer (Intelligence) [2018 (11) G.S.T.L. 229 (Ker.)] (Annexed herewith as Annexure A-7) that the invocation of Section 129 can only be done when ingredients of Section 130 are present. It was held that :- "A combined reading of Sections 129 and 130, especially the provision contained in sub-section (6) of the Section 129 indicates that the detention of the goods is contemplated under the statutes only when it is suspected that the goods are liable to confiscation. This aspect is seen clarified by the Central Board of Excise and Customs in the FAQs published by them on 31-3-2014 also. Section 130 dealing with the confiscation of goods indicates beyond doubt that the confiscation of goods is contemplated under the statutes only when a taxable supply is made otherwise than in accordance with the provisions contained in the statutes and the Rules made thereunder with the intent to evade payment of tax. If that be so, mere infraction of the procedural Rules like Rules 55 and 138 of the State GST Rules cannot result in detention of goods....
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....r that the government is empowered from in charge of a conveyance carrying any consignment of goods of value exceeding such amount as may be specified to carry with him such documents and such devices as may be prescribed. 7.2 Rule 138 of the Rules, 2017 reads as under :- "138. Information to be furnished prior to commencement of movement of goods and generation of e-way bill. - (1) Every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees - (i) in relation to a supply; or (ii) for reasons other than supply; or (iii) due to inward supply from an unregistered person, shall, before commencement of such movement furnish information relating to the said goods in Part A of FORM GST EWB-01, electronically, on the common portal. (2) Where the goods are transported by the registered person as a consignor or the recipient of supply as the consignee, whether in his own conveyance or a hired one or by railway or by air or by vessel, the said person or the recipient may generate the e-way bill in FORM GST EWB-01....
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.... Provided that where the goods are transported for a distance of less than ten kilometres within the State or Union territory from the place of business of the transporter finally to the place of business of the consignee, the details of conveyance may not be updated in the e-way bill." As per Rule 138 of the Rules, 2017, any registered person who causes movement of goods or assignment valuation exceeding Rs. 50,000/- must upload the information in a shape of e-way bill containing Part-A and Part-B. The appellant violated the provisions of Section 68 of the Act ibid and Rule 138 of the Rules framed thereunder. 7.3 Section 122 of the HGST/CGST Acts, 2017 deals with the issue of imposition of penalty for certain offences. The said section reads as under :- "122. Penalty for certain offences. - (1) Where a taxable person who - (i) supplies any goods or services or both without issue of any invoice or issues an incorrect or false invoice with regard to any such supply; (ii) issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Ac....
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....visions of this Act or the rules made thereunder; (xvii) fails to furnish information or documents called for by an officer in accordance with the provisions of this Act or the rules made thereunder or furnishes false information or documents during any proceedings under this Act; (xviii) supplies, transports or stores any goods which he has reasons to believe are liable to confiscation under this Act; (xix) issues any invoice or document by using the registration number of another registered person; (xx) tampers with, or destroys any material evidence or documents; (xxi) disposes off or tampers with any goods that have been detained, seized, or attached under this Act, he shall be liable to pay a penalty of ten thousand rupees or an amount equivalent to the tax evaded or the tax not deducted under Section 51 or short deducted or deducted but not paid to the Government or tax not collected under Section 52 or short collected or collected but not paid to the Government or input tax credit availed of or passed on or distributed irregularly, or the refund claim....
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....oceedings 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 seven 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 seven days may be reduced by the proper officer." 8. In any tax administration the provisions for Inspection, Search, Seizure and Arrest are provided to protect the interest of genuine taxpayers (as the tax evaders, by evading the tax, get an unfair advantage over the genuine taxpayers) and as a deterrent for tax evasion. These provisions are also required to safeguard Government's legitimate dues. Thus, these provisions act as a deterrent and by checking evasion provide a level playing field to genuine taxpayers. The statutory scheme is that Chapter XVI of the combined Acts deals with inspection, search, and seizu....
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....ered by the judgment delivered in the case of Modern Traders v. State of Uttar Pradesh, 763 of 2018, decided on 7-5-2018 - The operative part of the judgment is as under :- We find substance in the submission of the Learned Counsel for the petitioner. Once the E-way bill is produced and other documents clearly indicates that the goods are belongs to the registered dealer and the IGST has been charged there remains no justification in detaining and seizing the goods and asking the penalty. In view of the aforesaid facts, we quash the seizure order dated 5-5-2018 as well as the consequential penalty order dated 5-5-2018. We direct the respondent no. 3 to immediately release the goods and vehicle in favour of the petitioner. 10. Further, in case of another judgment it has been observed by the Hon'ble Allahabad High Court (UP) that :- In the case of Axpress Logistics India Pvt. Ltd. v. Union of India and 3 Others reported in Learned Counsel for the petitioner has submitted that the goods were intercepted at 1.30 AM on 5-5-2018 whereas the E-way Bill was generated on the same day at 11:55 AM which was furnished before the respondent No. 3 but reason....
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....gard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should for failure to perform a statutory obligation is matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute...." If the facts and circumstances of the present case are evaluated in the backdrop of the aforesaid principles laid down by the Hon'ble Supreme Court in the case of matter of imposition of penalty, it would be seen that in the present case, penalty has been imposed mechanically without any dishonest intention or malice or mens rea having been established or proved. 13. With the above observations and findings, the impugned order dated 4-5-2018, imposing tax and penalty under Section 129(3) of the HGST/CGST/IGST Acts upon the appellant is hereby set asid....