TaxTMI 
TaxTMI 
2024 (2) TMI 189
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....etition bearing W.P.A. No. 17452 of 2019 dated 2nd August, 2022 (hereinafter referred to as the "Impugned Judgment"), by which the said petition was dismissed. BRIEF FACTS: 4. The appellant, being a company, carries on the business of horizontal directional drilling using trenchless methodology for underground utilities - oil/gas, telecom and power. The appellant functions as a contractor and is duly registered under the Central Goods and Services Act, 2017 (hereinafter referred to as the "CGST Act") and the West Bengal Goods and Services Act, 2017 (hereinafter referred to as the "WBGST Act"). For many years, the appellant executed work contracts of the Gas Authority of India Limited (hereinafter referred to as "GAIL"), including work in the State of West Bengal for Dobhi-Durgapur Gas Pipeline Section. Prior to this, the appellant had executed work for GAIL in the State of Uttar Pradesh in Auraiya district. 5. Insofar as the execution of the work in Durgapur is concerned, on 30th May, 2019, the appellant availed of the services of M/s. Hariom Freight Carriers (hereinafter referred to as "HFC") for mobilising one machine being XCMG HDD Machine XZ6600 (hereinafter referred t....
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....nd, i.e., Rs.5,40,000/- (Rupees Five lakh forty thousand) in terms of Section 107(6), IGST Act. On 2nd July, 2019, Form GST DRC-07 with Reference No. ZA190719000030Y was issued raising a demand of tax of Rs.54,00,000/- (Rupees Fifty four lakhs) and a penalty of Rs.54,00,000/- (Rupees Fifty four lakhs) totalling to Rs.1,08,00,000/- (Rupees One crore and eight lakhs) was imposed. On 31st July, 2019, the appellant communicated to the respondent No. 1 that it had filed an appeal before the Appellate Authority after having deposited 10% of the tax demand and that a bank guarantee had been arranged in favour of the respondent No. 1 being the amount of demand, as per the order dated 27th June, 2019. A copy of the said bank guarantee was submitted before the respondent No. 1 with a request to give formal permission of release of goods on execution of bond in Form GST MOV-08 and submission of bank guarantee. It was further assured by the appellant to the respondent No. 1 that the bond under Form GST MOV-08 as well as bank guarantee would be executed immediately after receiving permission from the respondent No. 1. However, the appeal was not decided and thus, the appellant filed a writ p....
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....t even after depositing 10% of the tax amount, which was required for filing an appeal and the appellant being ready to pay the remaining amount of the tax and to give a bank guarantee for the penalty, the respondents had denied release of the consignment which was arbitrary. 11. It was next submitted that the consignment has remained uncared till now and must have been damaged. Ultimately, the consignment was the property of the appellant, who was merely transporting the same from Uttar Pradesh to West Bengal and thus, there should not be any GST imposed and in this regard, actually an E-way bill was generated, but unfortunately, validity of such transportation had elapsed due to factors, which the appellant was unaware of and were beyond its control. Thus, it was submitted that in such a background, the appellant should not be saddled with huge financial consequences which would be inequitable, unjustified, arbitrary and disproportionate. The movement of the consignment was in the nature of an "inter unit transfer" of capital goods from one place to another and not a result of any transaction of sale/purchase of goods between two parties, making it liable for taxation under th....
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..... But from the conduct of both, HFC and the appellant, it does not appear that such a plea was bonafide or genuine. 15. Learned counsel summed up, submitting that in any view of the matter, the appellant as well as HFC being in the business of such transactions, cannot plead ignorance of law. It was advanced that the mere fact that an E-way bill had been generated, and was used mistakenly beyond the validity period, cannot be accepted, much less in taxation matters where the time-period fixed for certain acts by the person, is required to comply with the same is strict, without any discretion either to the person concerned or to the authorities to relax the timelines. The only way going forward was to generate a fresh E-way bill, which has not been done. 16. On the point of quantum of penalty limited to which notice was issued, it was submitted that from the sequence of facts, it is obvious that the conduct of the appellant does not entitle it to any leniency, especially in tax matters, where the parties have to be very serious as government revenue is involved; which in turn has an effect on the very functioning of the Governments, both at the Central and State levels. DI....