TaxTMI 
TaxTMI 
2023 (1) TMI 1546
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....The petitioner contends that, after certain customisation of the machinery, the same which contains 61 pieces is sent back to the seller in Coimbatore for performance testing. The transport of the machine is under the cover of Delivery Challans but without E-way bills. The fourth respondent has intercepted the vehicle [MH-05-DK-7260] on 03.11.2020 and has issued detention order on 07.11.2020 in Form No. GST MOV-06 along with the notice in Form No. GST MOV-07 under Section 129(3) of the CGST Act. 3. The petitioner has deposited the tax demanded with penalty in terms of the aforesaid notices vide Challan No.54433946. Thereafter, the fourth respondent has issued ex parte order dated 09.11.2020 confirming the demand of IGST and penalty. The third respondent by the impugned order 16.03.2022 has disposed of the petitioner's appeal under Section 107(11) of the Karnataka Goods and Services Act, 2017 (for short the 'KGST Act') against the aforesaid order dated 09.11.2020 and CGST Act in GST.AP.355/2020-21. The third respondent has considered the petitioner's grievance against the fourth respondent's ex parte order dated 9.11.2020 as against the question whether levy o....
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....he customs supervision or customs seal Goods transported within the notified area Goods transported are transit from/to Nepal/ Bhutan 4. If goods are transported to a weighbridge within 20kms and back to the place of business covered under a Delivery Challan (DC). 5. Where Government or local authorities transport goods by rail as a consignor 6. Goods transported to/from the Ministry of Defence". The third respondent has concluded that because the transportation of the machinery by the petitioner from Ahmednagar to Coimbatore does not fit into any of these categories, the confirmation of the demand of tax and penalty by the fourth respondent is justified. 5. Sri. Mihir Mehta, the learned counsel for the petitioner, submits that the third respondent has not considered the petitioner's essential case that the transportation of the machinery from Ahmednagar to Coimbatore would be a 'Non-taxable Supply' and if it is a Non-taxable Supply, there cannot be any levy and collection of tax. He argues that if the transportation of machinery is a Non-taxable Supply and therefore outside the purview of the levy and collection as aforesaid, the petiti....
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....iginal transaction concluded in the month of July 2020. On penalty, Sri. Mihir Mehta submits that because it is undisputed that there is breach/contravention in not furnishing the information prior to commencement of the transportation and generation of E-way Bill, the petitioner's liability could only be to pay, as aforesaid Rs.25,000/- as penalty. 9. Sri Hema Kumar K., the learned Additional Government Advocate, drawing the attention of this Court to Annexure-C [A copy of the Delivery Challan relied upon by the petitioner to contend that transportation of machine from Ahmednagar to Coimbatore is a non-taxable supply], submits that there is nothing in this document to demonstrate that the transportation was as part of the original transaction and independent of any fresh consideration. He argues that in the absence of these material details in the Delivery Challan, it must necessarily deemed to be a Supply. As such, both the fourth respondent's ex-parte order dated 09.11.2020 and the third respondent's order dated 16.03.2020 are justified, and the levy and collection of tax cannot be found fault with. He also argues that this Court must, while deciding on the questi....
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..... If the transportation is a non-taxable supply and exempted, whether the petitioner could be called upon to pay tax and penalty either under Section 129(1(a) of the CGST/KGST Act. 13. As recorded at the very beginning, the petitioner's case is that the machinery is purchased under a proper purchase order and invoice in the month of July 2020 and the machinery is transported from Coimbatore to Ahmednagar with the machinery being re-transported to Coimbatore for performance testing. Crucially, the assertion that the machinery is purchased from Coimbatore and offered to tax are not disputed, and the respondents' contention that the re-transportation of machinery from Ahmednagar to Coimbatore even if it is for performance testing should be treated as a taxable supply, at the first instance, is based on Annexure-C. The assertion is that the necessary details are not mentioned in Annexure -C. However, this assertion must be examined not only in the light of the undisputed transaction viz, the purchase of the machinery in the month of July 2020 from Coimbatore but also in the light of the fact that the respondents cannot dispute that the very same machinery was re-transported ....
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....the purposes of these enactments. 17. This Court, on a conjoint reading of the definition of the expressions 'Non-taxable Supply' and 'supply' as mentioned in Sections 2(78) and 7(1)(a) of the CGST/KGST Act, must opine that for a supply as envisaged under Section 7(1)(a) of CGST/KGST Act, there must be consideration and because the subject re- transportation is without a separate consideration it would be an Exempted Supply as envisaged under CGST/ KGST Act. In the light of the afore, this Court must answer the first question in favour of the petitioner concluding that the re-transportation of machinery from Ahmednagar to Coimbatore, which is shown to be without a separate consideration and as part of the first transaction that is offered to tax, being a Non-taxable Supply is an Exempt Supply. 18. It is undisputed that recourse could be had to the provisions of Section 129 of the CGST/KGST Act, and wherever justified under Section 130 thereof, when there is interception for inspection of goods under section 68 of the CGST/KGST Act and it is found that the documentation is not in compliance with the Act and the Rules. With the detention and commencement of proc....