TaxTMI 
TaxTMI 
TaxTMI 
2022 (10) TMI 998
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....same is being entertained in view of the admitted position that the Tribunal contemplated under the Act has not been constituted till date. 5. The facts, in brief, are that the petitioner company is a company incorporated under the Companies Act and has a warehouse situate at Lucknow as well as at Haryana Gurgaon. The company for the purposes of transportation of the goods from Lucknow to Haryana hired a transporter for transporting the said goods on which a bilty tax invoice and Part-A of the e-way bill were generated and are contained in Annexure no.1. It is stated that the petitioner paid the tax as were required under the IGST Act, however, on account of an inadvertence Part-B of the e-way bill was not generated prior to the commencement of the transport of goods. It is on record that the driver commenced the journey on 24.09.2018 at 9.30 pm from the warehouse of the petitioner company and was intercepted on 25.09.2018 at 4.43 am. 6. The case of the petitioner's company is that although the Part-B of the e-way bill was not generated, the same was attributable to the transporter, however, before the goods were actually seized, the eway bill was generated at about 7.34 am i....
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....o.3 of 2019 which too has been dismissed by means of the order dated 31.10.2020. 11. The counsel for the petitioner argues that the appeal has been wrongly dismissed mainly agreeing with the findings recorded by the assessing authority which in turn had passed the order against the petitioner solely placing reliance on the judgment of the High Court of Madhya Pradesh which was passed placing reliance on the judgment in the case of VSL Alloys (India) Pvt. Ltd. vs. State of U.P and others reported in 2018 (67) NTN-DX 1. 12. The contention of the counsel for the petitioner is that the order imposing tax liability as well as the appellate order are bad in law and contrary to the mandate of the provisions of the CGST Act. He argues that from the plain reading of the section 129 of the Act, it is clear that on the goods being detained, the same are to be released on the owner of the goods or any other person coming forward and offering to pay the amount as indicated in clause-a, clause-b and clause-c of Section 129(1) of the Act. He argues that to determine the amount which is liable to be paid under clause-a, clause-b and clausec of Section 129 (1), the proper officer is empowered to ....
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.... 2020 decided on 17.12.2020 (Metenere Ltd. vs. Union of India and others). 16. The Standing Counsel, on the other hand, places reliance on the judgment of the M.P. High Court in the case of Gati Kintetsu Express Ltd. vs. Commercial Tax of M.P. and others decided on 05.7.2018 reported at (2018) 56 GSTR 114. He also places reliance on the judgment of the Madras High Court in Writ Petition No.1431 of 2020 (M/s Ideal Movers Private Limited vs. The State Tax Officer (ENF), Roving Squad, Vellore) decided on 24.01.2020. In the light of the said, it is ultimately argued that the writ petition is liable to be allowed. 17. Considering the submissions made at the bar, it is essential to see the mandatory provisions and scheme of the CGST Act which cover the issue in question particularly Sections 73, 74 and 75 read with section 122 and 129 and the Rule 138 of the CGST Rules. 18. CGST Act is provided into 21 Chapters. Chapter III of the said Act provides for levy and collection of the tax. Chapter IV concerns with the time and value of the supply. Chapter X of the Act provides for liability of the payment of tax. Chapter XV of the Act in question, with which we are concern, provides for man....
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....proper officer in writing of such payment. (6) The proper officer, on receipt of such information, shall not serve any notice under sub-section (1) or, as the case may be, the statement under sub-section (3), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made thereunder. (7) Where the proper officer is of the opinion that the amount paid under sub-section (5) falls short of the amount actually payable, he shall proceed to issue the notice as provided for in sub-section (1) in respect of such amount which falls short of the amount actually payable. (8) Where any person chargeable with tax under subsection (1) or sub-section (3) pays the said tax along with interest payable under section 50 within thirty days of issue of show cause notice, no penalty shall be payable and all proceedings in respect of the said notice shall be deemed to be concluded. (9) The proper officer shall, after considering the representation, if any, made by person chargeable with tax, determine the amount of tax, interest and a penalty equivalent to ten per cent of tax or ten thousand rupees, whichever is higher, due from such person and issue an ord....
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....r sub-section (1) of section 73, subject to the condition that the grounds relied upon in the said statement, except the ground of fraud, or any wilful-misstatement or suppression of facts to evade tax, for periods other than those covered under subsection (1) are the same as are mentioned in the earlier notice. (5) The person chargeable with tax may, before service of notice under sub-section (1), pay the amount of tax along with interest payable under section 50 and a penalty equivalent to fifteen per cent. of such tax on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment. (6) The proper officer, on receipt of such information, shall not serve any notice under sub-section (1), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made thereunder. (7) Where the proper officer is of the opinion that the amount paid under sub-section (5) falls short of the amount actually payable, he shall proceed to issue the notice as provided for in sub-section (1) in respect of such amount which falls short of the amount actually payable. (8) W....
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....in the event of a taxable person falling on the grounds mentioned under section 122(1) clause (i) to clause (xxi). The quantum of penalty is also specified under section 122 (1) of the Act. Section 122(1) is quoted herein below : 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 Act or the rules made thereunder; (iii) collects any amount as tax but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due; (iv) collects any tax in contravention of the provisions of this Act but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due; (v) fails to deduct the tax in accordance with the provisions of sub-section (1) of section 51, or deducts an amount which is less than the amount required to be deducted under the said sub-section, or where he fails to pay to the Government u....
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....e 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 claimed fraudulently, whichever is higher. 23. In the same Chapter, there is a procedure prescribed under section 129 which is invocable in respect of the goods and conveyances in transit. Section 129 is quoted herein below: "129. Detention, seizure and release of goods and conveyances in transit.-(1) Notwithstanding anything contained in this Act, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure, shall be released. (a) on payment of the applicable tax and penalty equal to one hundred per cent. of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent. of the value of goods or twenty-five thousand rupees, whichev....
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.... reading of Section 129(1)(a) of the Act, which provides for payment of the applicable tax and penalty equal to one hundred percent of the tax payable on such goods and Section 129(1) (b) provides for penalty equal to 50% of the value of goods reduced by tax amount paid thereon, further incorporates provisions for determination of quantum of penalty under section 129(3). Thus, under the scheme of the Act, the procedure for determination of tax and penalty is contained in Chapter XV read with section 122, 123, 125, 126, 127 and 128 of the Act and a parallel procedure is prescribed under section 129 of the Act in case of goods, which are in transit. 26. Section 129, can be invoked by the department with regard to the goods in transit and the goods can be released only in the event the owner of the goods comes forward for payment of penalty as specified in clause (a) or (b) or (c) of Section 129 (1) of the Act and on payment of the said amount, the intent is to give quietus to the litigation. 27. The question that arises here is that what happened the owner of the goods or the person does not volunteer to pay the penalty as prescribed under clause (a), (b), (c) of Section 129 (1) of....
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....der dated 17.10.2018 purportedly to be passed in exercise of the power under Section 129 of the CGST Act as well as the order dated 31.10.2020 passed by the respondent no.4 whereby the appeal preferred by the petitioner has been dismissed. 4. The counsel for the petitioner states that as the Tribunal contemplated under the Act has not been constituted, as such, the petitioner is availing the remedy under Article 226 of the Constitution of India and the same is being entertained in view of the admitted position that the Tribunal contemplated under the Act has not been constituted till date. 5. The facts, in brief, are that the petitioner company is a company incorporated under the Companies Act and has a warehouse situate at Lucknow as well as at Haryana Gurgaon. The company for the purposes of transportation of the goods from Lucknow to Haryana hired a transporter for transporting the said goods on which a bilty tax invoice and Part-A of the e-way bill were generated and are contained in Annexure no.1. It is stated that the petitioner paid the tax as were required under the IGST Act, however, on account of an inadvertence Part-B of the eway bill was not generated prior to the com....
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....nnexure no.12. 10. It is argued that the petitioner was never served with a copy of the order dated 17.10.2018, as such, the petitioner could not prefer the appeal within the prescribed time as a result whereof the respondent has threatened to encash the bank guarantee and to avoid the same, the petitioner deposited the amount as was determined against the petitioner in view of the order dated 17.10.2018. The petitioner thereafter preferred an appeal no.3 of 2019 which too has been dismissed by means of the order dated 31.10.2020. 11. The counsel for the petitioner argues that the appeal has been wrongly dismissed mainly agreeing with the findings recorded by the assessing authority which in turn had passed the order against the petitioner solely placing reliance on the judgment of the High Court of Madhya Pradesh which was passed placing reliance on the judgment in the case of VSL Alloys (India) Pvt. Ltd. vs. State of U.P and others reported in 2018 (67) NTN-DX 1. 12. The contention of the counsel for the petitioner is that the order imposing tax liability as well as the appellate order are bad in law and contrary to the mandate of the provisions of the CGST Act. He argues that....
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....-B of the e-way bill, which has not been discharged. In light of the said, he argues that the petition lacks merit and is liable to be dismissed. 15. The counsel for the petitioner has placed reliance on the judgment passed by this Court in Writ Tax No.763 of 2018 decided on 09.5.2018 (Modern Traders vs. State of U.P.) ; the judgment in Writ Tax No.344 of 2018 decided on 07.02.2020 (Skipper Limited vs. Union of India); the judgment in Writ Tax No.360 of 2020 decided on 17.12.2020 (Metenere Ltd. vs. Union of India and others). 16. The Standing Counsel, on the other hand, places reliance on the judgment of the M.P. High Court in the case of Gati Kintetsu Express Ltd. vs. Commercial Tax of M.P. and others decided on 05.7.2018 reported at (2018) 56 GSTR 114. He also places reliance on the judgment of the Madras High Court in Writ Petition No.1431 of 2020 (M/s Ideal Movers Private Limited vs. The State Tax Officer (ENF), Roving Squad, Vellore) decided on 24.01.2020. In the light of the said, it is ultimately argued that the writ petition is liable to be allowed. 17. Considering the submissions made at the bar, it is essential to see the mandatory provisions and scheme of the CGST Act....
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....for such tax periods other than those covered under sub-section (1) are the same as are mentioned in the earlier notice. (5) The person chargeable with tax may, before service of notice under subsection (1) or, as the case may be, the statement under sub-section (3), pay the amount of tax along with interest payable thereon under section 50 on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment. (6) The proper officer, on receipt of such information, shall not serve any notice under sub-section (1) or, as the case may be, the statement under sub-section (3), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made thereunder. (7) Where the proper officer is of the opinion that the amount paid under sub-section (5) falls short of the amount actually payable, he shall proceed to issue the notice as provided for in sub-section (1) in respect of such amount which falls short of the amount actually payable. (8) Where any person chargeable with tax under sub-section (1) or sub-section (3) pays the said tax along with interest payable u....
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.... issuance of order. (3) Where a notice has been issued for any period under subsection (1), the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for such periods other than those covered under subsection (1), on the person chargeable with tax. (4) The service of statement under sub-section (3) shall be deemed to be service of notice under sub-section (1) of section 73, subject to the condition that the grounds relied upon in the said statement, except the ground of fraud, or any wilfulmisstatement or suppression of facts to evade tax, for periods other than those covered under subsection (1) are the same as are mentioned in the earlier notice. (5) The person chargeable with tax may, before service of notice under sub-section (1), pay the amount of tax along with interest payable under section 50 and a penalty equivalent to fifteen per cent. of such tax on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment. (6) The proper officer, on receipt of such information, s....
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....e rules made thereunder, or failure to furnish any information on being asked for, in writing, by the proper officer. 21. Thus, Sections 73 and 74 deal with situations of determination of tax in case of non-payment simplicitor or for the reasons of fraud or wilful misstatement or suppression of facts respectively. 22. Chapter XIX of the said Act provides for offences and penalties. Section 122 of the Act provides for the quantum of penalty leviable in the event of a taxable person falling on the grounds mentioned under section 122(1) clause (i) to clause (xxi). The quantum of penalty is also specified under section 122 (1) of the Act. Section 122(1) is quoted herein below : 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 Act or the rules made thereunder; (iii) collects any amount as tax but fails to pay the same to the Government beyond a period of three months from the date on which such payment ....
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....ues any invoice or document by using the registration number of another registered person; (xx) tampers with, or destroys any material evidence or document; (xxi) disposes off or tampers with any goods that have been detained, seized, or attached under this Act, 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 claimed fraudulently, whichever is higher. 23. In the same Chapter, there is a procedure prescribed under section 129 which is invocable in respect of the goods and conveyances in transit. Section 129 is quoted herein below : "129. Detention, seizure and release of goods and conveyances in transit.-(1) Notwithstanding anything contained in this Act, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyanc....
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.... lakh rupees, whichever is less: Provided further 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 fifteen days may be reduced by the proper officer." 24. Thus, in the Act in question, the power of inspection, search and seizure can be carried out under Chapter XIV or in case of goods in transit under section 129. Section 129, on the plain reading, can be equated with an alternative dispute redressal mechanism and provides an opportunity to the owner of the goods or any other person to pay amounts as specified under section 129 (1)(a) or (b) or (c) of the said Act. 25. On a plain reading of clause 129(1)(a) of the Act, which provides for payment of penalty equal to 200% of the tax payable on such goods or penalty equal to 50% of the value of the goods, further incorporates provisions for determination of quantum of penalty under section 129(3). Thus, under the scheme of the Act, the procedure for determination of tax and penalty is contained in Chapter XV read with section 122, 123, 125, 126, 127 and 128 of the Act and a parallel procedure is prescribed under section 129 o....