TaxTMI 
TaxTMI 
2021 (6) TMI 40
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....he case :- 2.1 M/s. Taj Iron Store, 25 Dudu Bagh, Near Mayank Cinema, Loha Mandi, S.C. Road Jaipur-302001 holding GST Registration No. 08ACWPK9035H1ZO are engaged in the trading and supply of M.S Angle, M.S. Channel, M.S. Shape, M.S. Section, M.S. Beam, M.S. Bar, M.S. Flat etc., falling under the Chapter of 72 of CGST Tariff. 2.2 Acting upon an intelligence, that M/s. Taj Iron Store, Jaipur were evading Tax by way of availing Input Tax Credit, fraudulently, merely on the strength of invoices, without actual receipt of goods, principal place of business premise of M/s. Taj, was searched on 13-9-2018 by the officers of Directorate General of Goods & Services Tax Intelligence (DGGI in short), Jaipur Zonal Unit, Jaipur under Panchnama proceedings, in presence of independent panch witnesses and Shri Mohammed Riyaz Khan, Proprietor of M/s. Taj Iron Store. 2.3 During the Panchnama proceedings, Shri Mohammed Riyaz Khan, Proprietor, M/s. Taj Iron Store informed that the said premise i.e. 25, Dudu Bagh, Near Mayank Cinema, Loha Mandi, S.C. Road Jaipur-302001 is their retail shop and mostly cash sales are performed from this place and their wholesale sales are undertak....
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....n during the search proceedings at M/s. Taj Iron Store and agreed with the contents mentioned therein. 2.8 Vide their letter dated 18-9-2018, Shri Mohammed Riyaz Khan, Proprietor of M/s. Taj Iron Store submitted, while applying for release of aforementioned seized goods that the assessee himself informed about the said godown, where the impugned goods have been seized; that the assessee maintains regular books of account and he entered all its purchases and sales in their books of account; that the said premise was taken on rent from M/s. Taj Industries and the rent of the same was paid through cheque/NEFT; that the assessee issued invoices on which address of godown premise has been printed; that they have tried to upload amendments but could not do so due to some technical issues; that there was no mala fide intention of the assessee at any stage; that they have now added the godown premise as their additional place of business by amending their registration certificate and therefore, seized goods may be released, provisionally. 2.9 Subsequently, the impugned goods were provisionally released by the Additional Commissioner, Central Goods and Services Tax and Centr....
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....ly agrees with the Panchnama proceedings. 2.15 From the foregoing, it appeared that M/s. Taj Iron Store, intentionally, in order to avoid payment of CGST/SGST did not add their additional place of business situated at S.P. 636, A3, Road No. 6, V.K.I Area, Jaipur in their GST Registration Certificate. 2.16 From the above, it appeared that M/s. Taj Iron Store, 25 Dudu Bagh, Near Mayank Cinema, Loha Mandi, S.C. Road Jaipur have contravened the provisions of Sections 22 (read with Rule 11 of CGST Rules, 2017), 35, 37, 38 & 39 of the CGST Act, 2017 and Rules 56 & 61 of the CGST Rules, 2017 by storing dutiable goods at an unregistered premise, without any authority and also by wrongly accounting for seized goods in their books of account and also not shown the same properly in periodical returns filed by them with the sole intent to evade payment of applicable GST, therefore, the said seized goods as detailed in GST INS 02 to Panchnama dated 13-9-2018, drawn at the premise of M/s. Taj Iron Store and which were lying at plot No. S.P 636, A3, Road No. 6, V.KI. Area, Jaipur and totally valued at Rs. 5,53,10,446/- were appeared to be liable for confiscation under Section 130 ....
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....isional release order shall be en-cashed as per Rule 140(2) of CGST Act, 2017 and corresponding provisions of SGST Act. (ii) Imposed a Penalty of Rs. 99,55,880/- (Rupees Ninety Nine Lacs Fifty five Thousand Eight Hundred and Eighty only) in terms of Section 122(1)(xvi) and Section 122(1)(xviii) of the CGST Act, 2017 and corresponding provision of SGST Act, upon M/s. Taj Iron Store, 25, Dudu Bagh, Near Mayank Cinema, Loha Mandi, Sansar Chandra Road, Jaipur. (iii) Imposed a Penalty of Rs. 25,000/- (Rupees Twenty Five Thousand only) under Section 125 or the CGST Act, 2017 upon M/s. Taj Iron Store, 25, Dagh, Near Mayank Cinema, Loha Mandi, Sansar Chandra Road, Jaipur. (iv) Imposed a Penalty Rs. 25,000/- (Rupees Twenty Five Thousand only) in terms of Section 122(3)(a) of the CGST Act, 2017 upon Shri Mohammed Riyaz Khan, Proprietor of M/s. Taj Iron Store. (v) Also imposed a Penalty Rs. 25,000/- (Rupees Twenty Five Thousand only) under Section 125 of the CGST Act, 2017 upon Shri Mohammed Riyaz Khan, Proprietor of M/s. Taj Iron Store. 4. Being aggrieved with the impugned Order in Original No. 1- 02/Dem/GST/AC/DIV-C/2020-21, dated 5-5-2020, passed by the Assi....
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....appellant, which is condonable. A.2.2 Tally Ledgers : The appellant has been maintaining the account in Tally data and on the ledgers the address of the godown is visible as 'SP 636, A3 Road No. 6, VKI Areas Jaipur'. A sample ledger is enclosed herewith to authenticate the contention of the applicant. This also affirms that the applicant never carried mala fide intent to evade tax. The seizure deserves to be vacated on this score as well. A.2.3 Purchase Invoices : The sample purchase invoices are also enclosed, which show the address of the Godown of the applicant as SP 636, Road No. VKI Area. Jaipur and all the invoices have been duly accounted for Had there been any mala fide intent of the appellant, the address of the godown would not have been there at the invoices. The fact affirms the contention of the applicant and it is merely a bona fide mistake. A.2.4 Address at Tax invoices : From the date 1-7-2017, the applicant have been issuing Tax Invoices and paying GST. The address at the Tax Invoices of the applicant appears as 'SP636 A3, Road No. 6, VKI Area, Jaipur. Had there been any mala fide intent of the appellan....
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....T THERE WAS MERELY A PROCEDURAL LAPSE ON THE PART OF APPELLANT. B.1 In the SCN, it was not alleged that the stock at 'Godown' was not accounted for. The entire stock was duly entered in the stock registered being maintained in tally. The appellant is again submitting the ledger of stock, which suggests that there was no difference in stock and provisions of Section 130 of the CGST Act, 2017 read with Rule 139 of CGST Rules, 2017 are not invokable. B.2 Without prejudice to matter contained above, it is also to mention that the investigation seized the stock in the 'godown', whereas there was no difference in stock. There was merely a procedural lapse as from the various facts, it was on the spot proved that the appellant never intended to evade tax. However, the department seized the entire goods without considering any plea of the appellant and this action of the department caused heavy financial losses to the appellant. Further, the adjudicating authority also ignored all the evidences submitted by the appellant and confirmed the allegations. This unjustifiable approach in deciding the matter and ignorin....
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....No. 6, VKI Area, Jaipur under Section 67(2) of the CGST Act, 2017 read with Rule 39 of the CGST Rule, 2017. The seizure of the department was unlawful as there was no violation of the Section 67(2) of the CGST Act, 2017 read with Rule 39 of the CGST Rule, 2017. It shall be vital to go through the provisions of the Section 67(2) of the Act ibid and Rule 39 of the Rules ibid. C.1.1 Section 67(1) and 67(2) stipulates that - "67(1) Where the proper officer not below the rank of Joint Commissioner has reasons to believe that : (a) a taxable person has suppressed any transaction relating to supply of goods or services or both or the stock of goods in hand, or has claimed input tax credit in excess of his entitlement under this Act or has indulged in contravention of any of the provisions of this Act or the rules made thereunder to evade tax under this Act; or (b) any person engaged in the business of transporting goods or an owner or operator of a warehouse or a godown or any other place is keeping goods which have escaped payment of tax or has kept his accounts or goods in such manner as....
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....les made thereunder with intent to evade payment of tax; or (v) uses any conveyance as a means of transport for carriage of goods in contravention of the provision of this Act or the rules made thereunder unless the owner of the conveyance proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance, then all such goods or conveyances shall be liable to confiscation and the person shall be liable to penalty under section 122..." C.1.4 Rule 139 of the CGST Rules, 2017 stipulates that - "139. Inspection, search and seizure. - (1) where the proper officer not below the rank of Joint Commissioner has reasons to believe that a place of business or any other place is to be visited for the purposes of inspection or search or, as the case may be, seizure in accordance with the provisions of section 67, he shall issue an authorization in FORM GST INS-01 authorising any other officer subordinate to him to conduct the inspection or search as the case may be, seizure of goods, documents, books or things table to confiscation....
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....(1)(iv) stipulates that goods can be confiscated if any taxable person Contravenes any of the provisions of this Act or the rules made thereunder with intent to evade payment of tax. In matter, there was no intent that the appellant had intent to evade the tax. In the matter, no 'GST' has been demanded, which also establishes the contention of the appellant that there was no intent to evade tax. Further, Rule 139 of Rules ibid, is procedural legislation of the contention of the statute under Section 130 of the Act ibid. In the matter provisions of Section 130(1)(ii) & Section 130(1)(iv), have been wrongly invoked, thus provisions of Rule 130 are also redundant and superfluous. C.4 Further, in the SCN the goods have also been proposed to be confiscated under Rule 39 of the Rules, ibid. Rule 39 pertains to the Input Service Distribution, which is not applicable in the matter; thus have been invoked wrongly. C.5 From, the above analysis, it is absolutely clear that in the matter there was no suppression, no excess availment of credit, no any intent to evade tax, no any intent to escape tax and no any such documentation to evade tax. In SCN als....
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....nary perusal of the Search Panchnama dated 13-9-2018, it is observed that the officers called the witnesses at 0945 hrs at the premises and per thereafter the search was started at 0945 hrs. However, the Panch witnesses, arranged by the DGGI and Officers of DGGI did not offer their search. In light of the facts, it is evident that the panchnama proceedings failed to follow the procedures of search in light of provisions of Cr.PC. D.2.1.1 In the Panchnama dated 13-9-2018. It has been recorded that entire party offered their personal search, but it did not endorse that the panch witnesses arranged by DGGI also offered their personal search. This vital fact has been ignored by the Adjudicating Authority while discussing the same at para 30 of the impugned Order in Original. D.2.2 Documents/equipments resumed on 13-9-2018 from the searched premises have not been relied upon in the SCN: In the panchnama dated 13-9-2018 resumed significant quantum of documents and electronic peripherals, (As per Annexure A to the Panchnama) which contained the complete business proceedings of the years of the appellant. However, in this Show Cause Notice, neither....
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....nd the accompanying witnesses should offer themselves for their personal search to the person in-change of the premises being searched. However, in the matter the panch witnesses did not offer their personal search while leaving the premises after completion of the search. The impugned Order in Original is silent on this plea also of the appellant. D.2.5 In light of the facts, it is evident that the panchnama proceedings failed to fallow the procedures of search in light of provisions of Cr.PC. and impugned Order in Original failed to comment on these submissions of the appellant and thus the Order in Original deserves to be set aside. E. PENALTY UNDER SECTION 122(1)(xvi), 122(1)(xviii) AND SECTION 125, SECTION 122(3) OF THE CGST ACT, 2017 IS NOT IMPOSABLE IN THE MATTER. In the impugned SCN, it has been invoked that penalty should be imposed on the appellants in terms of Section 122(1)(xvi) and (xviii) and Section 125 of the CGST Act, 2017 for contravention of the provisions of CGST Act, 2017 and the Rules made thereunder with an ....
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....le if there is intent or mens rea on the part of appellant to evade the tax. However, in the matter, there had neither been any intent of the appellant to evade the tax and nor the investigation has put forth any evidence in respect of intent of the appellant. Moreover, the SCN has also not alleged any intent to evade tax. Merely non endorsement of 'additional place of business' on the GST Portal cannot be made a lawful allegation to invoke provisions of referred sections of the Act. E.2 Without prejudice to the submissions earlier made, it is submitted that it is an undeniable fact that the appellant neither suppressed any fact from the department nor there has been any intentional contravention of the provisions of the Central Goods & Services Tax Act, 2017 or the rules made thereunder with intent to evade payment of duty. The appellant were regularly filing periodical returns under the Act ibid & Rules made thereunder, which carried all the information in respect of purchase & sales of the appellants. This sufficiently proves that there has not been a mens rea on the part of the appellant. E.3 Further, without prejudice to su....
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....Commissioner of Central Excise & Services Tax, Vapi - 2017 (351) E.L.T. 38 (Guj.) 5. Personal Hearing in the case was held on 7-10-2020. Shri Arvind Birla, Advocate appeared for personal hearing through video conference. He explained the case in detail and reiterated the submission made in the grounds of appeal and requested to decided the case at the earliest. 6. I have carefully gone through the facts of the case and submissions made by the appellant in their appeal memorandum and also during personal hearing. I find that during search on 13-9-2018, at principal place of business of M/s. Taj Iron Store, 25 Dudu Bagh, Near Mayank Cinema, Loha Mandi, S.C. Road Jaipur-302001 by the officers of Directorate General of GST Intelligence (DGGI), Jaipur, under Panchnama proceedings in the presence of independent panch witnesses and Shri Mohammed Riyaz Khan, Proprietor of M/s. Taj Iron Store, Jaipur, it was stated by Shri Mohammed Riyaz Khan, Proprietor of M/s. Taj Iron Store that the current premise i.e. 25, Dudu Bagh, Near Mayank Cinema, Loha Mandi, S.C. Road Jaipur is their retail shop and mostly cash sales are performed from this place and their wholesale sales are unde....
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....oth from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees : 8. As per Section 35(1) of the CGST Act, 2017 :- Every registered person shall keep and maintain, at his principal place of business, as mentioned in the certificate of registration, a true and correct account of - (a) production or manufacture of goods; (b) inward and outward supply of goods or services or both; (c) stock of goods; (d) input tax credit availed; (e) output tax payable and paid; and (f) such other particulars as may be prescribed : Provided that where more than one place of business is specified in the certificate of registration, the accounts relating to each place of business shall be kept at such places of business : Provided further that the registered person may keep and maintain such accounts and other particulars in electronic form in such manner as may be prescribed. 9.&....
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....ame was paid through cheque/NEFT; that the assessee issued invoices on which address of godown premise has been printed; that they have tried to upload amendments but could not do so due to some technical issues; that there was no mala fide intention at any stage; that they have added the godown premise as their additional place of business by amending their registration certificate. It is a fact that the information regarding additional place i.e. godown situated at S.P. 636, A3 Road No. 6, V.K.I Area, Jaipur was received at the time of search of principal place of M/s. Taj Iron Store, 25 Dudu Bagh, Loha Mandi, SC Road, Jaipur. As per the registration Certificate, the principal place of Business was shown as 25 Dudu Bagh, Loha Mandi, S.C. Road. Jaipur-302001 no other additional place of business was shown. Thus, the said godown was not a registered place under the provisions of CGST Act/Rules. The appellant could not produce any documentary evidence in support of their claim regarding additional place of business i.e. godown. They added the said godown only after seizure of the goods which clearly proves their mala fide intention and the contravention of Section 22(1) of CGST Act ....
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....agh. Loha Mandi, S.C. Road, Jaipur intentionally did not declare the additional place of business i.e. godown situated at S.P. 636, A3 Road No. 6, V.K.I Area, Jaipur in their GST Registration and carried out the business activities from the unregistered place. Further, the appellant could not produce any corroborative evidence in support of their claim that they had applied for amendment in registration of additional place of business i.e. godown. The appellant declared said premises (godown) as an additional place of business in its registration certificate by amending the registration certificate on 17-9-2018 only after search of the godown and seizure of the goods. It clearly shows their mala fide intention with intent to evade GST. Thus, appellant have contravened the provisions of Sections 22 (read with Rule 11 of CGST Rules, 2017), 35, 37, 38 & 39 of the CGST Act, 2017 by storing dutiable goods illegally at an unregistered premise, without any authority of law and also by wrongly accounting for seized goods in their books of account and also not shown the same properly in periodical returns filed by them with the sole intent to evade payment of CGST/SGST. Therefore, the impug....