TaxTMI 
TaxTMI 
2021 (9) TMI 937
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....the Central Goods and Services Tax Act/State Goods and Services Tax Act ("CGST/SGST Act" for short), read with Rule 140 of the CGST/SGST Rules. Secondly, it has also sought a declaration that Section 129 of the CGST Act does not mandate the deposit of tax again, once the tax is already paid. Thirdly, it has challenged the show-cause notice dated 01.04.2021, passed by the respondent-department under Section 129(3) of the CGST/SGST Act. Fourthly, it has challenged the legality of different orders, dated NIL, passed by the respondent no. 3 under Section 129(3) of the CGST/SGST Act. Fifthly, it has challenged the order dated, 01.04.2021, passed by respondent no. 3, for detaining the trucks owned by the petitioner. Sixthly, it has challenged the rectification/withdrawal orders dated, 23.04.2021, passed by the respondent no. 3 under Rule 142(7) of the CGST/SGST Rules. Seventhly, it has challenged the order dated 17.04.2021, issued by the respondent No.3 under Section 130 of the CGST/SGST Act. It has also challenged the number of orders, all dated 23.04.2021, issued in Forms GST DRC-07, under Se+ction 130 of the CGST/SGST Act passed by the respondent No.3. 3. Briefly,....
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....oices, the e-Way bills, the bilty, the registration certificates, and the driver's license. The drivers' statements were recorded on 01.04.2021 in Form GST MOV-01. 7. Since the e-Way bills had expired within three days, the respondent no. 3, the Assistant Commissioner (GST-State), issued three separate orders, all dated 01.04.2021, for physical verification/inspection of the consignment. Upon physical verification, the description on the e-Invoices was found to be matching with the physical goods verified in the vehicle, namely fixed vegetable oils of vegetable grade i.e. mango kernel oil, mahua oil and rice bran oil. Even the quantity of the goods recorded in the e-Invoices matched with the physically verified quantity. 8. Furthermore, the officers of respondent no. 3 passed orders of detention under Section 129(1) of the CGST/SGST Act 2017, and under Section 20 of the Integrated Goods and Services Tax Act, 2017 ("IGST Act, 2017" for short). Despite the fact that there was no discrepancy, which was discovered during the physical verification of the trucks, still the officers of respondent no. 3 ordered the detention of the goods, and of the trucks for further proceedings. Th....
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....wed to submit the security and bond in Form GST MOV-08 for release of the conveyance. 14. Furthermore, on 09.04.2021, the petitioner submitted a detailed reply to the supplementary notices issued by respondent no. 3. The petitioner categorically requested the respondent no. 3 to take the said reply into consideration, and to release the trucks and the goods detained by them. However, despite these replies, the respondent no. 3 did not give an opportunity of hearing to the petitioner. Instead by three separate orders, all dated NIL, the three trucks belonging to the petitioner were detained by respondent no. 3 under Section 129(3) of the CGST/SGST Act. In the said orders, according to the petitioner, the respondents have entered into the issue of classification of the Rice Bran Oil, although such an issue could not be raised at this stage by the department. 15. After passing the impugned orders dated NIL, the respondent-department carried out a correction in the said order, and amended Page No. 4 of the said order. 16. Since the petitioner was aggrieved by the said orders dated NIL, on 05.04.2021 it submitted a representation before the respondents. Despite the submission o....
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....has rectified the demand raised in the impugned original orders, all dated NIL, passed under Section 129 of the CGST/SGST Act. According to the petitioner, these orders dated 23.04.2021 were passed without giving an opportunity of hearing to the petitioner. Hence, the present writ petition. 21. Heard Mr. Puneet Agarwal, the learned counsel for the petitioner, Mr. Mohit Maulekhi, the learned Brief Holder for the State, the respondent nos.1 to 3 and Mr. V.K. Kapruwan, the learned Standing Counsel for the Union of India, the respondent no.4 and perused the record. 22. During the arguments, Mr. Puneet Agarwal, the learned counsel for the petitioner, confined himself to two points: firstly, he has challenged the constitutional validity of Section 129 of the Central Goods and Services Tax Act, 2017 as well as the same Section i.e. Section 129 of the Uttarakhand Goods and Services Tax Act, 2017 and Rule 140 of the CGST Rules, 2017 on the grounds that these provisions are arbitrary, unreasonable and violative of Article 14, 19 (1) (g) and Article 300 A of the Constitution of India. Secondly, that the petitioner was not given an opportunity of being heard before passing the orders dat....
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....amount payable under clause (a) or clause (b) in such form and manner as may be prescribed: Provided that no such goods or conveyance shall be detained or seized without serving an order of detention or seizure on the person transporting the goods. (2) The provisions of sub-section (6) of Section 67 shall, mutatis mutandis, apply for detention and seizure of goods and conveyances. (3) The proper officer detaining or seizing goods or conveyances shall issue a notice specifying the tax and penalty payable and thereafter, pass an order for payment of tax and penalty under clause (a) or clause (b) or clause (c). (4) No tax, interest or penalty shall be determined under sub-section (3) without giving the person concerned an opportunity of being heard. (5) On payment of amount referred in sub-section (1), all proceedings 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 fourteen days of such detention or seizure, further proceedings shall be initiat....
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....x" are defined under Article 366 (12-A) of the Constitution of India as incorporated by the Amendment Act, 2016, which reads as follow:- "(12-A) "goods and services tax" means any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption." 28. The expression "supply" is defined under Section 7 of the CGST Act, 2017, which reads as follow:- 7. Scope of Supply.- (1) For the purposes of this Act, the expression "supply" includes- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; (b) import of services for a consideration whether or not in the course or furtherance of business, and (c) the activities specified in Schedule I, made or agreed to be made without a consideration. (1A) where certain activities or transactions constitute a supply in accordance with the provisions of sub- section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II. ....
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....truing an enactment of a Legislature, the Court must presume that the enactment is intra-virus to the Constitution and the Legislature knows its limits and that it is only legislating for those, who are actually within its jurisdiction. The burden of proof is upon the shoulders of the incumbent who challenges the constitutional validity of an Act. 32. In the present matter, Mr. Puneet Agarwal, the learned counsel for the petitioner, submitted that Article 14 of the Constitution forbids class legislation; Article 19 (1) (g) guarantees that all citizens shall have the right to practice any profession, or to carry on any occupation, trade or business and Article 300 A provides that no person shall be deprived of his property save by authority of law. According to the learned counsel for the petitioner, the provisions-in-question are violative of Article 14, 19 (1) (g) and Article 300 A of the Constitution of India. 33. The equal protection of laws guaranteed by Article 14 does not mean that all laws must be general in character. In fact, identical treatment in unequal circumstances would amount to inequality. Article 14 prohibits class-legislation, but it does not forbid reasona....
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....titutionality of a statute and the burden is upon him who attacks it to show that there has been a clear transgression of constitutional principles. (3) The presumption may be rebutted in certain cases by showing that on the fact of the statute, there is no classification at all and no difference peculiar to any individual or class and not applicable to any other individual or class, and yet the law hits only a particular individual or class. (4) It must be presumed that the Legislature understands and correctly appreciates the need of its own people, that its laws are directed to problems made manifest by experience and that its discrimination are based on adequate grounds. (5) In order to sustain the presumption of constitutionality the court may take into consideration matters of common knowledge, matters of report, the history of the times and may assume every state of facts which can be conceived existing at the time of the legislation. (6) The Legislature is free to recognize degrees of harm and may confine its restrictions to those cases where the need is deemed to be the clearest. (7) While good faith and knowledge of the existin....
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....lause (6) of Article 19 of the Constitution, the State is authorized to impose reasonable restrictions on the right to carry on a trade, profession or business. The said conditions are:- (i) reasonable restrictions, and; (ii) in the interest of general public. 41. In Ramji Lal vs. I.T.O., AIR 1951 SC 97, the Hon'ble Supreme Court held that the exercise of none of the fundamental rights guaranteed by Article 19 (1) can claim absolute immunity from taxation. The fundamental right of citizen to practice any profession or carry on any trade or business is not wholly free from the taxing power of the Parliament or the State. No citizen has any right to carry on his trade or business without paying taxes lawfully levied by the Parliament or the State. In State of West Bengal vs. Subodh Gopal Bose, AIR 1954 SC 92, the Hon'ble Supreme Court held that taxation is an independent power of the State and there is no fundamental right to be immune from taxation. In Kailash Nath vs. State of U.P., AIR 1957 SC 790, the Hon'ble Supreme Court held that a tax law otherwise valid creates no unreasonable restriction. In the facts and circumstances of the instant matter, the learned....
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....initiated after expiry of due date i.e. fourteen days from the date of issue of the Form MOV-06. Thereafter the proceedings under Section 130 was initiated and Form GST MOV-10 was issued on 17.04.2021, providing therein a time of seven days to the petitioner to prefer reply to the same. After expiry of the seven days time period, provided to the petitioner in MOV-10 notices, orders under Section 130 in the Form of MOV-11 were issued on 23.04.2021, directing the petitioner to deposit tax, penalty, fine on goods and on conveyance as provided under Section 130 (2). 45. At this stage, the provisions of Section 130 is reproduced hereunder:- "130. Confiscation of goods or conveyances and levy of penalty - (1) Notwithstanding anything contained in this Act, if any person- (i) supplies or receives any goods in contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of tax; or (ii) does not account for any goods on which he is liable to pay tax under this Act; or (iii) supplies any goods liable to tax under this Act without having applied for registration; or (iv) contravenes any of the prov....
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.... and after giving reasonable time not exceeding three months to pay fine in lieu of confiscation, dispose of such goods or conveyance and deposit the sale proceeds thereof with the Government." 46. According to the CGST Act/ SGST Act and CGST Rules, for the purposes of verification of the e-way bill, interception and inspection of the conveyance and/or goods, the proper officer under Rule 138 B of the CGST Rules shall be the officer who has been assigned the function under sub-section (3) of Section 68 and where the person in-charge of the conveyance fails to produce any prescribed document or where the proper officer intends to undertake an inspection, he shall record a statement of the person in-charge of the conveyance in Form GST MOV-01. In addition, the proper officer shall issue an order for physical verification/inspection of the conveyance, goods and documents in Form GST MOV-02, requiring the person in charge of the conveyance to station the conveyance at the place mentioned in such order and allow the inspection of goods. Within twenty four hours of the issuance of Form GST MOV-02, the proper officer shall prepare a report in Part A of Form GST EWB-03 and upload the sa....
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.... very strong base to proceed for confiscation. Mere suspicion is not sufficient to invoke the provision of the confiscation. Moreover, the petitioner should be given an opportunity of being heard according to the intent of the Legislature before passing the confiscation order as mentioned in sub-section (4) of Section 130. However, the respondents have completely failed to show that the petitioner was indeed, given an opportunity of being heard before the passing the orders of the confiscation in Form GST MOV-11. The confiscation orders dated 23.04.2021, passed under Section 130 in Form GST MOV-11, are not found to be passed in accordance with law. Therefore, the said impugned orders dated 23.04.2021 are liable to be quashed and set aside. 50. The last submission of Mr. Mohit Maulekhi, the learned Brief Holder for the State, is that the petitioner has alternative and efficacious remedy before the appellate authority under Section 107 of the Act of the CGST Act/SGST Act, therefore, the writ petitions are not maintainable. 51. Section 107 of the CGST Act/SGST Act is reproduced hereunder:- "107. Appeals to Appellate Authority- (1) Any person aggrieved by any decision or....
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....nt has paid the amount under sub-section (6), the recovery proceedings for the balance amount shall be deemed to be stayed. (8) The Appellate Authority shall give an opportunity to the appellant of being heard. (9) The Appellate Authority may, if sufficient cause is shown at any stage of hearing of an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing: Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal. (10) The Appellate Authority may, at the time of hearing of an appeal, allow an appellant to add any ground of appeal not specified in the grounds of appeal, if it is satisfied that the omission of that ground from the grounds of appeal was not wilful or unreasonable. (11) The Appellate Authority shall, after making such further inquiry as may be necessary, pass such order, as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the adjudicating authority that passed the said decision or order: Provided that an o....