LEXUS MOTORS LTD. AND ANR. VERSUS JOINT COMMISSIONER OF STATE TAX, GOVERNMENT OF WEST BENGAL AND ORS.

Delay in filing monthly return – Input Tax Credit – GST Act – HELD THAT:- Hearing is interrupted since computation sheet of interest issued to petitioner has not been disclosed. Petitioner has leave to file supplementary affidavit, which will be accepted on adjourned date on advance copy served.

List on 26th September, 2019 at 3 p.m.

No.- W. P. 13253 (W) of 2019

Dated.- September 20, 2019

Mr Arindam Sinha, J.

For The Petitioners : Mr. J. P. Khaitan, Sr.Adv., Mr. Agnibesh Sengupta And Mr. Avishek Guha

For The State-Respondents : Mr. Abhratosh Majumdar, Ld. A.A.G., Mr. Prithu Dudhoria And Mr. Avra Majumdar

For The Union of India : Mr. Sujit Mitra

ORDER

Petitioner by this writ petition seeks, inter alia, declaration, it is entitled to avail Input Tax Credit (ITC) under GST Act before due date of monthly return and is not required to pay any interest under section 50, with reference to such input tax, for any delay in filing monthly return and has impugned order dated 6th June, 2019 demanding payment of interest at ₹ 1,52,94,475/-

Mr. Khaitan, learned senior advocate appears on behalf of petitioner and submits, ITC of petitioner is credit available to it on tax already paid. There cannot be interest charged thereon. He refers to sub-sections (1) and (2) of section 50 in Central Goods and Services Tax Act, 2017 to submit without prejudice, even if there is interest to be paid thereon, prescription for calculation of it has not yet been provided. He refers to Agenda for 31st GST Council Meeting (22nd December 2018), in particular item 7(xx), to paragraph 3 thereunder. He also refers paragraphs 4 and 6.

Two sentences from paragraph 3 are extracted and reproduced below :

Thus, although the law permits part payment of tax but no such facility has been yet made available on the common portal. This being the case, a registered person cannot even avail his eligible ITC as he cannot furnish his return unless he is in a position to deposit his entire tax liability as self-assessed by him. This inflexibility of the system increases the interest burden. The same is illustrated as below:

…………………………………………..

……………………………………………”

He hands up extract from Finance (No.2) Act, 2019. He relies on clause (b) under sub-section (2) of section 1 and proviso to section 100, to cause amendment of section 50 (on notification). He prays for interim order pending adjudication.

Mr. Majumdar, learned senior advocate, Additional Advocate General draws attention to impugned order dated 6th June, 2019. Two paragraphs from the order are reproduced below :

The RTP is liable to pay interest as per the provision of section 50(1) of the WBGST Act, 2017. It is seen from subsection (1) of section 50 that the liability to pay interest arises automatically, when a person who is liable to pay tax, fails to pay the tax to the Government within the period prescribed. In fact, the liability to pay interest under section 50(1) arises even without any assessment, as the person is required to pay such interest “on his own”. Therefore, it is clear that the liability to pay interest under section 50(1) is self-imposed and also automatic, without any determination by any one.

However, a computation sheet of Interest under section 50(1) has already been sent to the RTP through e-mail on 27/09/2018 and issued reminder on 29/05/2019 & 03/06/2019 but the RTP has failed to make payment till date.”

He submits, the liability to pay interest is automatic and is to be self-imposed. The notice was issued in exercise of power under provisions in sub-section (3) of Section 79.

Hearing is interrupted since computation sheet of interest issued to petitioner has not been disclosed. Petitioner has leave to file supplementary affidavit, which will be accepted on adjourned date on advance copy served.

List on 26th September, 2019 at 3 p.m.

M/S. S.R. ENTERPRISES VERSUS THE COMMISSIONER OF STATE GOODS AND SERVICE TAX DEPARTMENT, THIRUVANANTHAPURAM AND ASSISTANT STATE TAX OFFICE, SQUAD NO. III, STATE GOODS AND SERVICES TAX DEPARTMENT, THIRUVANANTHAPURAM

Detention of goods – non-payment of the penalty amount under Section 129 of the Act – expired E-Way bill – HELD THAT:- It is deemed appropriate to direct the 2nd respondent to release the consignment and vehicle covered by Ext.P4 detention notice to the petitioner on the petitioner furnishing a bank guarantee for the amount of ₹ 3,56,100/- before the said respondent.

The 2nd respondent shall thereafter complete the adjudication in relation to Ext.P4 detention notice after considering the reply, if any, filed by the petitioner to the detention notice, and after hearing the petitioner, within a period of one month from the date of receipt of a copy of this judgment.

No.- WP(C). No. 25251 OF 2019

Dated.- September 23, 2019

MR A. K. JAYASANKARAN NAMBIAR, J.

For The PETITIONER : ADVS. SRI. V. R. GOPU, SRI. J. NARAYANA PILLAI AND S. PROMOD

For The RESPONDENTS : GOVERNMENT PLEADER SMT. THUSHARA JAMES

JUDGMENT

The petitioner has approached this Court aggrieved by Ext.P4 notice of detention under Section 129(3) of the Central Goods and Service Tax/ State Goods and Service Tax (CGST/SGST) Act. It is the case of the petitioner that the goods were consigned from West Bengal under cover of Ext.P1 E-Way Bill, which was generated on 23.08.2019 and was valid up to 16.09.2019. The consignment however reached Parassala Check Post only on 18.09.2019 after the expiry of the validity period of the E-Way Bill. It is therefore that Ext.P4 detention notice was issued demanding tax as also penalty quantified at twice the tax found payable on the consignment. It is not in dispute that the tax amount has been paid and the present detention is for non-payment of the penalty amount under Section 129 of the Act, amounting to ₹ 3,56,100/-.

2. I have heard the learned counsel appearing for the petitioner and also the learned Government Pleader appearing for the respondents.

On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I deem it appropriate to direct the 2nd respondent to release the consignment and vehicle covered by Ext.P4 detention notice to the petitioner on the petitioner furnishing a bank guarantee for the amount of ₹ 3,56,100/- before the said respondent. The 2nd respondent shall thereafter complete the adjudication in relation to Ext.P4 detention notice after considering the reply, if any, filed by the petitioner to the detention notice, and after hearing the petitioner, within a period of one month from the date of receipt of a copy of this judgment. The petitioner shall produce a copy of the writ petition along with a copy of this judgment, before the 2nd respondent, for further action.

SRI RAMAKRISHNA TRADERS VERSUS STATE OF GUJARAT

Release of seized goods alongwith the truck – petitioner submitted that the petitioner has already paid the amount of tax and penalty as computed by them – HELD THAT:- By way of interim relief, the respondents are directed to release the Truck No. KA-14-B-6847 along with the goods contained therein subject to the petitioner paying the differential amount of tax and penalty between the amount paid by the petitioner and the amount computed by the respondents under section 129 of the Central/Gujarat Goods and Services Tax Act, 2017.

No.- R/SPECIAL CIVIL APPLICATION NO. 15748 of 2019

Dated.- September 23, 2019

MS HARSHA DEVANI AND MS SANGEETA K. VISHEN, JJ.

For The Petitioner (s) : UCHIT N SHETH (7336)

For The Respondent (s) : DS AFF.NOT FILED (N)(11)

ORAL ORDER

(PER : HONOURABLE MSJUSTICE HARSHA DEVANI)

Heard, MrUchit NSheth, learned advocate for the petitioner and MrTrupesh Kathiriya, learned Assistant Government Pleader for the respondents.

RuleMrTrupesh Kathiriya, learned Assistant Government Pleader waives service of notice of rule on behalf of respondents.

MrUchit NSheth, learned advocate for the petitioner submitted that the petitioner has already paid the amount of tax and penalty as computed by them.

By way of interim relief, the respondents are directed to release the Truck NoKA-14-B-6847 along with the goods contained therein subject to the petitioner paying the differential amount of tax and penalty between the amount paid by the petitioner and the amount computed by the respondents under section 129 of the Central/Gujarat Goods and Services Tax Act, 2017.

Direct service is permitted today.

JAMSHED S/O ALIM VERSUS STATE OF GUJARAT

Service of notice – Form GST MOV 10 – section 130 of the CGST Act, 2017 – HELD THAT:- Mr. Trupesh Kathiriya, learned Assistant Government Pleader to ensure that a copy of the notice issued in Form GST MOV 10 shall be duly furnished to the learned advocate for the petitioner forthwith, today – the petitioner is required to remain present before the respondent authority on 25.09.2019.

Stand over to 26th September 2019.

No.- R/SPECIAL CIVIL APPLICATION NO. 15834 of 2019

Dated.- September 23, 2019

MS HARSHA DEVANI AND MS SANGEETA K. VISHEN, JJ.

For The Petitioner (s) : MANAN K PANERI (7959)

For The Respondent (s) : MR TRUPESH KATHIRIYA, AGP (99) AND DS AFF.NOT FILED (N)(11)

ORAL ORDER

(PER : HONOURABLE MS.JUSTICE HARSHA DEVANI)

1. Mr. Trupesh Kathiriya, learned Assistant Government Pleader, under instructions, has stated that the notice in Form GST MOV 10 under section 130 of the Central Goods and Services Tax Act, 2017 has been issued and served upon the petitioner.

2. Mr. Manan Paneri, learned advocate for the petitioner, however, disputes the aforesaid fact and states that while signatures of the petitioner were obtained on various documents, a copy of the MOV 10 notice has not been served upon him.

3. In view of the above, Mr. Trupesh Kathiriya, learned Assistant Government Pleader to ensure that a copy of the notice issued in Form GST MOV 10 shall be duly furnished to the learned advocate for the petitioner forthwith, today.

3.1 In terms of the said notice, the petitioner is required to remain present before the respondent authority on 25.09.2019. He may, therefore, remain present before the concerned authority and make his submissions.

4. Stand over to 26th September 2019.

M/S BRIDGE HYGIENE SERVICES PRIVATE LIMITED VERSUS THE STATE TAX OFFICER SECOND CIRCLE, SGST DEPARTMENT, TAX COMPLEX, KOTTAYAM AND THE COMMISSIONER OF STATE GST, STATE GST DEPARTMENT, THIRUVANANTHAPURAM

Assessment order u/s 62 of the GST Act – failure to file returns within time – Extension of time for filing returns – HELD THAT:- The statutory prescription of 30 days from the date of receipt of the assessment order passed under sub section (1) of Section 62 has to be strictly construed against an assessee and in favour of the revenue, since this is a provision in a taxing statute that enables an assessee to get an order passed against him on best judgment basis set aside. The provision must be interpreted in the same manner as an exemption provision in a taxing statute.

This Court may not be justified in granting an extension of the period contemplated under sub section (2) of Section 62, so as to enable the assessee to file a return beyond the said period for the purposes of getting the benefit of withdrawal of an assessment order passed on best judgment basis under Section 62(1) of the GST Act.

Petition dismissed.

No.- WP(C). No. 25066 OF 2019(G)

Dated.- September 23, 2019

MR A. K. JAYASANKARAN NAMBIAR, J.

For The Petitioner : ADVS. SRI. HARISANKAR V. MENON AND SMT. MEERA V. MENON

For The Respondents : None

JUDGMENT

The petitioner, who is an assessee under the Goods and Services Tax Act (hereinafter referred to as the ‘GST Act’) on the rolls of the 1st respondent, defaulted on filing of returns from July 2018 onwards. It is stated that although there was default in filing of the returns upto July 2018, returns upto August 2018 have later been filed satisfying the tax due with interest. The grievance in the writ petition is against Ext.P1 series of orders of assessment passed by the 1st respondent under Section 62 of the GST Act, pursuant to a best judgment assessment.

2. In the writ petition, the case of the petitioner is that although there is a provision under the Act for an automatic setting aside of the best judgment assessment in circumstances where the registered dealer furnishes a valid return within 30 days of service of the assessment order, the petitioner sees this provision as futile in his case inasmuch as even if the petitioner were to file the returns within the extended time of 30 days from the date of receipt of the best judgment assessment orders, he would not be in a position to pay the admitted tax liability as reflected from the returns. It is therefore that he prays for a direction to quash Exts.P1 to P1(g) orders issued by the 1st respondent on the ground that the 1st respondent, while passing the said assessment orders on best judgment basis, did not adhere to the yardsticks indicated in Section 62 for exercise of the power.

3. I have heard the learned counsel for the petitioner and Smt. Thushara James, the learned Government Pleader for the respondents.

4. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I find that as per provisions of Section 62 of the SGST Act, it is only in circumstances where an assessee refuses to furnish the particulars required for an assessment under the Act, through the filing of a return within time that the proper officer has to proceed to finalise the assessment on the best of his judgment, taking into account all relevant material which is available or which he has gathered for the said purpose. Sub section (2) of Section 62 indicates that even after the service of the best judgment assessment order on the assessee, if the assessee furnishes a valid return within 30 days thereafter, the assessment order passed on best judgment basis will be deemed to have been withdrawn save for the continuance of the liability to pay interest for late payment of the tax. Thus, the statutory provisions are clear with regard to the time frame within which the assessee has to file his return and pay tax based on the said returns if he wants the assessment done on best judgment basis to be cancelled.

5. In the instant case, it is not in dispute that the assessee failed to file the returns within the time normally available under the SGST Act. It is also not in dispute that it was on account of the failure of the assessee to file the returns within time that the proper officer was constrained to complete the assessment on best judgment basis. Although the petitioner has a case that the assessment on best judgment basis was itself done in an arbitrary manner and without adhering to the guidelines indicated in the Section, I find that the statutory provisions enable the assessee, who is aggrieved by the assessment order passed on best judgment basis, to furnish his returns within a further period of 30 days and pay tax thereon on the basis of the return filed by him, and in that event, the order of the proper officer passed on best judgment basis will stand automatically withdrawn.

6. The submission of the learned counsel for the petitioner in the instant case however is that he cannot resort to even this procedure since even if he were to file returns within the period of 30 days specified in Section 62(2) of the SGST Act, he would not be able to pay the admitted tax liability on account of paucity of funds.

7. In my view, the statutory prescription of 30 days from the date of receipt of the assessment order passed under sub section (1) of Section 62 has to be strictly construed against an assessee and in favour of the revenue, since this is a provision in a taxing statute that enables an assessee to get an order passed against him on best judgment basis set aside. The provision must be interpreted in the same manner as an exemption provision in a taxing statute.

This Court may not be justified in granting an extension of the period contemplated under sub section (2) of Section 62, so as to enable the assessee to file a return beyond the said period for the purposes of getting the benefit of withdrawal of an assessment order passed on best judgment basis under Section 62(1) of the GST Act. Under such circumstances I find that the prayer sought for in the writ petition cannot be granted. The writ petition therefore fails, and is accordingly dismissed.

JS FUSION INDUSTRIES PRIVATE LIMITED VERSUS THE STATE TAX OFFICER 1, SGST DEPARTMENT, ETTUMANOOR AND THE COMMISSIONER OF STATE GST STATE GST DEPARTMENT, TAX TOWERS, THIRUVANANTHAPURAM

Validity of assessment orders passed pursuant to a best judgment assessment – Section 62 of the GST Act – Default in filing of returns – HELD THAT:- The statutory prescription of 30 days from the date of receipt of the assessment order passed under sub section (1) of Section 62 has to be strictly construed against an assessee and in favour of the revenue, since this is a provision in a taxing statute that enables an assessee to get an order passed against him on best judgment basis set aside. The provision must be interpreted in the same manner as an exemption provision in a taxing statute.

This Court may not be justified in granting an extension of the period contemplated under sub section (2) of Section 62, so as to enable the assessee to file a return beyond the said period for the purposes of getting the benefit of withdrawal of an assessment order passed on best judgment basis under Section 62(1) of the GST Act – the prayer sought for in the writ petition cannot be granted.

Petition dismissed.

No.- WP(C). No.25059 OF 2019 (F)

Dated.- September 23, 2019

MR A. K. JAYASANKARAN NAMBIAR, J.

For The Petitioner : ADVS. SRI.HARISANKAR V. MENON AND SMT.MEERA V. MENON

For The Respondents : SMT. THUSHARA JAMES; GP

JUDGMENT

The petitioner, who is an assessee under the Goods and Services Tax Act (hereinafter referred to as the ‘GST Act’) on the rolls of the 1st respondent, defaulted on filing of returns from May 2018 onwards. The grievance in the writ petition is against Ext.P1 series of orders of assessment passed by the 1st respondent under Section 62 of the GST Act, pursuant to a best judgment assessment.

2. In the writ petition, the case of the petitioner is that although there is a provision under the Act for an automatic setting aside of the best judgment assessment in circumstances where the registered dealer furnishes a valid return within 30 days of service of the assessment order, the petitioner sees this provision as futile in his case inasmuch as even if the petitioner were to file the returns within the extended time of 30 days from the date of receipt of the best judgment assessment orders, he would not be in a position to pay the admitted tax liability as reflected from the returns. It is therefore that he prays for a direction to quash Exts.P1 to P1(l) orders issued by the 1st respondent on the ground that the 1st respondent, while passing the said assessment orders on best judgment basis, did not adhere to the yardsticks indicated in Section 62 for exercise of the power.

3. I have heard the learned counsel for the petitioner and Smt. Thushara James, the learned Government Pleader for the respondents.

4. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I find that as per provisions of Section 62 of the SGST Act, it is only in circumstances where an assessee refuses to furnish the particulars required for an assessment under the Act, through the filing of a return within time that the proper officer has to proceed to finalise the assessment on the best of his judgment, taking into account all relevant material which is available or which he has gathered for the said purpose. Sub section (2) of Section 62 indicates that even after the service of the best judgment assessment order on the assessee, if the assessee furnishes a valid return within 30 days thereafter, the assessment order passed on best judgment basis will be deemed to have been withdrawn save for the continuance of the liability to pay interest for late payment of the tax. Thus, the statutory provisions are clear with regard to the time frame within which the assessee has to file his return and pay tax based on the said returns if he wants the assessment done on best judgment basis to be cancelled.

5. In the instant case, it is not in dispute that the assessee failed to file the returns within the time normally available under the SGST Act. It is also not in dispute that it was on account of the failure of the assessee to file the returns within time that the proper officer was constrained to complete the assessment on best judgment basis. Although the petitioner has a case that the assessment on best judgment basis was itself done in an arbitrary manner and without adhering to the guidelines indicated in the Section, I find that the statutory provisions enable the assessee, who is aggrieved by the assessment order passed on best judgment basis, to furnish his returns within a further period of 30 days and pay tax thereon on the basis of the return filed by him, and in that event, the order of the proper officer passed on best judgment basis will stand automatically withdrawn.

6. The submission of the learned counsel for the petitioner in the instant case however is that he cannot resort to even this procedure since even if he were to file returns within the period of 30 days specified in Section 62(2) of the SGST Act, he would not be able to pay the admitted tax liability on account of paucity of funds.

7. In my view, the statutory prescription of 30 days from the date of receipt of the assessment order passed under sub section (1) of Section 62 has to be strictly construed against an assessee and in favour of the revenue, since this is a provision in a taxing statute that enables an assessee to get an order passed against him on best judgment basis set aside. The provision must be interpreted in the same manner as an exemption provision in a taxing statute.

This Court may not be justified in granting an extension of the period contemplated under sub section (2) of Section 62, so as to enable the assessee to file a return beyond the said period for the purposes of getting the benefit of withdrawal of an assessment order passed on best judgment basis under Section 62(1) of the GST Act. Under such circumstances I find that the prayer sought for in the writ petition cannot be granted. The writ petition therefore fails, and is accordingly dismissed.

MANGOMEADOWS AGRICULTURAL PLEASURE LAND (P) LTD. VERSUS THE STATE TAX OFFICER SGST DEPARTMENT, ETTUMANNOR AND THE COMMISSIONER OF STATE GST, STATE GST DEPARTMENT, TAX TOWERS, THIRUVANANTHAPURAM

Validity of assessment orders passed pursuant to a best judgment assessment – Section 62 of the GST Act – Default in filing of returns – HELD THAT:- The statutory prescription of 30 days from the date of receipt of the assessment order passed under sub section (1) of Section 62 has to be strictly construed against an assessee and in favour of the revenue, since this is a provision in a taxing statute that enables an assessee to get an order passed against him on best judgment basis set aside. The provision must be interpreted in the same manner as an exemption provision in a taxing statute.

This Court may not be justified in granting an extension of the period contemplated under sub section (2) of Section 62, so as to enable the assessee to file a return beyond the said period for the purposes of getting the benefit of withdrawal of an assessment order passed on best judgment basis under Section 62(1) of the GST Act – the prayer sought for in the writ petition cannot be granted.

Petition dismissed.

No.- WP(C). No. 25067 OF 2019(G)

Dated.- September 23, 2019

MR A. K. JAYASANKARAN NAMBIAR, J.

For The Petitioner : ADVS. SRI. HARISANKAR V. MENON AND SMT. MEERA V. MENON

For The Respondents : SMT. THUSHARA JAMES;GP

JUDGMENT

The petitioner, who is an assessee under the Goods and Services Tax Act (hereinafter referred to as the ‘GST Act’) on the rolls of the 1st respondent, defaulted on filing of returns from April 2018 onwards. It is stated that although there was default in filing of the returns, returns upto October 2018, have later been filed satisfying the tax due with interest. The grievance in the writ petition is against Ext.P1 order of assessment passed by the 1st respondent under Section 62 of the GST Act, pursuant to a best judgment assessment.

2. In the writ petition, the case of the petitioner is that although there is a provision under the Act for an automatic setting aside of the best judgment assessment in circumstances where the registered dealer furnishes a valid return within 30 days of service of the assessment order, the petitioner sees this provision as futile in his case inasmuch as even if the petitioner were to file the returns within the extended time of 30 days from the date of receipt of the best judgment assessment orders, he would not be in a position to pay the admitted tax liability as reflected from the returns. It is therefore that he prays for a direction to quash Ext.P1 order issued by the 1st respondent on the ground that the 1st respondent, while passing the said assessment orders on best judgment basis, did not adhere to the yardsticks indicated in Section 62 for exercise of the power.

3. I have heard the learned counsel for the petitioner and Smt. Thushara James, the learned Government Pleader for the respondents.

4. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I find that as per provisions of Section 62 of the SGST Act, it is only in circumstances where an assessee refuses to furnish the particulars required for an assessment under the Act, through the filing of a return within time that the proper officer has to proceed to finalise the assessment on the best of his judgment, taking into account all relevant material which is available or which he has gathered for the said purpose. Sub section (2) of Section 62 indicates that even after the service of the best judgment assessment order on the assessee, if the assessee furnishes a valid return within 30 days thereafter, the assessment order passed on best judgment basis will be deemed to have been withdrawn save for the continuance of the liability to pay interest for late payment of the tax. Thus, the statutory provisions are clear with regard to the time frame within which the assessee has to file his return and pay tax based on the said returns if he wants the assessment done on best judgment basis to be cancelled.

5. In the instant case, it is not in dispute that the assessee failed to file the returns within the time normally available under the SGST Act. It is also not in dispute that it was on account of the failure of the assessee to file the returns within time that the proper officer was constrained to complete the assessment on best judgment basis. Although the petitioner has a case that the assessment on best judgment basis was itself done in an arbitrary manner and without adhering to the guidelines indicated in the Section, I find that the statutory provisions enable the assessee, who is aggrieved by the assessment order passed on best judgment basis, to furnish his returns within a further period of 30 days and pay tax thereon on the basis of the return filed by him, and in that event, the order of the proper officer passed on best judgment basis will stand automatically withdrawn.

6. The submission of the learned counsel for the petitioner in the instant case however is that he cannot resort to even this procedure since even if he were to file returns within the period of 30 days specified in Section 62(2) of the SGST Act, he would not be able to pay the admitted tax liability on account of paucity of funds.

7. In my view, the statutory prescription of 30 days from the date of receipt of the assessment order passed under sub section (1) of Section 62 has to be strictly construed against an assessee and in favour of the revenue, since this is a provision in a taxing statute that enables an assessee to get an order passed against him on best judgment basis set aside. The provision must be interpreted in the same manner as an exemption provision in a taxing statute.

This Court may not be justified in granting an extension of the period contemplated under sub section (2) of Section 62, so as to enable the assessee to file a return beyond the said period for the purposes of getting the benefit of withdrawal of an assessment order passed on best judgment basis under Section 62(1) of the GST Act. Under such circumstances I find that the prayer sought for in the writ petition cannot be granted. The writ petition therefore fails, and is accordingly dismissed.

NIKIT MITTAL, SMT. RENU SINGH VERSUS THE STATE OF JHARKHAND

Grant of anticipatory bail – alleged availment of input tax credit on the basis of forged invoice – Section 132 of the Jharkhand GST Act, 2017 – alleged offence of Smt. Renu Singh – HELD THAT:- The petitioner of A.B.A. No.6521 of 2018 namely Smt. Renu Singh is directed to surrender in the Court of learned Chief Judicial Magistrate, Bokaro within four weeks from today and in the event of her arrest or surrendering, she will be enlarged on bail provisionally for a period of one month from the date of her surrender on showing proof of reversing input tax credit of ₹ 50,00,000/- with the Goods and Service Tax Department after the date of this order and on furnishing bail bond of ₹ 25,000/- (Twenty five thousand) with two sureties of the like amount each to the satisfaction of learned Chief Judicial Magistrate, Bokaro in connection with Bokaro Steel City P.S. Case No.121 of 2018 corresponding to G.R. No.663 of 2018 with the condition that she will co-operate with the investigation of the case and appear before the investigating officer as and when noticed by him and furnish her mobile number and photocopy of the Aadhar Card with an undertaking that she will not change her mobile number during the pendency of the case and subject to the conditions as laid down under Section 438(2) of the Code of Criminal Procedure.

Petitioner of A.B.A. No.4745 of 2018 namely Nikit Mittal – HELD THAT:- The petitioner of A.B.A. No.4745 of 2018 namely Nikit Mittal is directed to surrender in the Court of learned Chief Judicial Magistrate, Bokaro within one month from today and in the event of his arrest or surrendering, he will be enlarged on bail on showing proof of reversing input tax credit of ₹ 1,06,282/- to the Goods and Service Tax Department after the date of this order and on furnishing bail bond of ₹ 25,000/- with two sureties of the like amount each to the satisfaction of learned Chief Judicial Magistrate, Bokaro in connection with Bokaro Steel City P.S. Case No.121 of 2018 corresponding to G.R. No.663 of 2018 with the condition that he will cooperate with the investigation of the case and appear before the investigating officer as and when noticed by him and furnish his mobile number and photocopy of the Aadhar Card with an undertaking that he will not change his mobile number during the pendency of the case and subject to the conditions as laid down under Section 438(2) of the Code of Criminal Procedure.

No.- A.B.A. No.4745 of 2018, A.B.A. No.6521 of 2018

Dated.- September 23, 2019

Citations:

  1. Mahaveer Prasad @ Mahaveer PD Versus State of Jharkhand and Shri Prem Arsen Kujur – 2019 (12) TMI 274 – JHARKHAND HIGH COURT
  2. VIMAL YASHWANTGIRI GOSWAMI Versus STATE OF GUJARAT – 2019 (8) TMI 627 – GUJARAT HIGH COURT
  3. M/s. Jayachandran Alloys (P) Ltd. Versus The Superintendent of GST and Central Excise, The Deputy Commissioner of GST and Central Excise Head Quarters Preventive Unit, The Additional Commissioner of GST and Central Excise, The Commissioner of GST and Central Excise – 2019 (5) TMI 895 – MADRAS HIGH COURT
  4. UNION OF INDIA & ORS. Versus M/s. MAKE MY TRIP (INDIA) PVT. LTD. – 2019 (1) TMI 1293 – SC Order

Mr. Justice Anil Kumar Choudhary

For the Petitioners : Mr. Nitin Kr. Pasari , Advocate, Ms. Sidhi Jalan , Advocate

For the State : Mr. Suraj Verma, Addl.P.P.

ORDER NO.13 DATED- 23.09.2019

Apprehending their arrest in connection with Bokaro Steel City P.S. Case No.121 of 2018 corresponding to G.R. No.663 of 2018 instituted under Sections 409, 420 and 120-B of the Indian Penal Code read with Section 73, 74, 132(1)(e), 132(1)(f), 132(1)(i) and 132(1)(iv) of the Goods and Service Tax Act, 2017, the petitioners have moved this Court for grant of privileges of anticipatory bail.

Heard learned counsel appearing for the petitioners and learned A.P.P appearing for the State.

Learned counsel appearing for the petitioners submits that the allegation against the petitioner of A.B.A. No.6521 of 2018 namely Smt. Renu Singh is that she being the proprietor of Renu Raj Enterprises, Bokaro claimed to be situated at the address Flat No.12, Saraswati Nagar, Puruliya Road, Chas, Bokaro and claimed to transact business from there though in fact, she did not transact any business and she without any sell or purchase availed input tax credit on the basis of forged invoice to the tune of ₹ 2,92,64,476.59/- in violation of Section 132 of the Jharkhand Goods and Services Tax Act, 2017. It is submitted that the allegation against the petitioner of A.B.A. No.6521 of 2018 namely Smt. Renu Singh is false. It is submitted that the allegation against her of having a fake business premises is incorrect as in the enquiry report itself, it has been mentioned that the son of Smt. Renu Singh has intimated the Goods and Services Tax Authorities that the office of the petitioner- Smt. Renu Singh has been shifted to Co-operative Colony of Boakro and there the officials of Goods and Services Tax Department have traced the said establishment of which the petitioner- Smt. Renu Singh is the proprietor.

Learned counsel for the petitioners submits that the allegation against the petitioner of A.B.A. No.4745 of 2018 namely Nikit Mittal is that the petitioner Nikit Mittal being the then Director of Sri Ram Alloys and Ingot Private Limited, without any sell or purchase availed input tax credit on the basis of forged invoice to the tune of ₹ 1,06,282/- in violation of Section 132 of the Jharkhand Goods and Services Tax Act, 2017. It is submitted that the allegation against the petitioner is false.

It is next submitted that the prosecution has been initiated against the petitioners with oblique and mala fide motive just to harass the petitioners and without initiating any proceeding under sections 73 and 74 of the Jharkhand Goods and Services Tax Act, 2017 against the petitioners; pursuant to the inspection carried out by officials of the State Tax Department. Learned counsel for the petitioners relies upon the Order of this Court in the case of Mahaveer Prasad @ Mahaveer Pd. Versus The State of Jharkhand and Another dated 17.08.2019 passed in A.B.A. No.4782 of 2018 in which this Court relied upon the judgment of Hon’ble Madras High Court dated 04.04.2019 passed in Writ Petition No.5501 of 2019 & WMP No.6251 of 2019 in the case of M/s. Jayachandran Alloys (P) Ltd. Vs. The Superintendent of GST and Central Excise & Others wherein the Hon’ble Madras High Court has held as under:-

“In the present case, the Department does not dispute that action was intended or envisaged in the light of Section 132 of the CGST Act, the counter fairly stating that the provisions of Section 132 of the CGST Act were ‘shown’ to the Assessee. There is thus no doubt in my mind that the Department intended to intimidate the petitioner with the possibility of punishment under 132 and this action is contrary to the scheme of the Act. While the activities of an assessee contrary to the scheme of the Act are liable to be addressed swiftly and effectively by the Department, (the statute in question being a revenue statute where strict interpretation is the norm), officials cannot be seen to be acting in excess of the authority vested in them under the statute. I am of the considered view that the power to punish set out in Section 132 of the Act would stand triggered only once it is established than an assessee has ‘committed’ an offence that has to necessarily be post-determination of the demand due from an assessee, that itself has to necessarily follow the process of an assessment.”(Emphasis Supplied)

Learned counsel for the petitioners next relied upon the unreported order of the Division Bench of Hon’ble Gujarat High Court dated 07.08.2019 in R/Special Civil Application No. 13679 of 2019, in the case of Vimal Yashwantgiri Goswami Vs. State of Gujarat wherein the Hon’ble Gujarat High Court has observed that prosecution under section 132 of the Goods and Services Tax Act should normally be launched only after the adjudication is completed in terms of 73 and 74 of the Goods and Services Tax Act. The learned counsel for the petitioner also drew attention of this Court to paragraph no.35 of Judgment of M/s. Jayachandran Alloys (P) Ltd. Vs. The Superintendent of GST and Central Excise & Others (Supra) wherein the decision of the Hon’ble Supreme Court of India in C.A. No. 8081 of 2018 & C.A. No. 8082 of 2018 dated 23.01.2019 has been quoted wherein the Hon’ble Supreme Court of India while considering the provisions of Finance Act, 1994 which are similar to the provision of section 69,73 and 74 of the Jharkhand Goods and Services Tax Act, 2017 observed as under:-

“Heard learned counsel for the parties at length.

The issue is as to whether the power of arrest under Section 91 of the Finance Act, 1994 (‘the said Act’) can be exercised without following the procedure as set out in Section 73 A(3) and (4) of the said Act. The High Court has decided, after detailed discussion, that it is mandatory to follow the procedure contained in Section 73 A(3) and (4) of the said Act before going ahead with the arrest of a person under Sections 90 and 91. We are in agreement with the aforesaid conclusion and see no reason to deviate from it.

Accordingly, these appeals are dismissed.” (Emphasis Supplied)

It is next submitted that the petitioner of A.B.A. No.6521 of 2018 namely Smt. Renu Singh is ready and willing to reverse the input tax credit allegedly taken by her on the basis of forged invoice to the tune of ₹ 2,92,64,476.59/- in installments to the Goods and Service Tax Department and the petitioner of A.B.A. No.4745 of 2018 namely Nikit Mittal is also ready and willing to reverse the input tax credit allegedly taken by him on the basis of forged invoice to the tune of ₹ 1,06,282/- to the Goods and Service Tax Department within a month. It is then submitted that without following the procedures contained under Section 72 and 73 of the Jharkhand Goods and Service Tax Act, 2017, the prosecution ought not to have been initiated. It is lastly submitted that the petitioners are ready and willing to co-operate with the investigation of the case. Hence, it is submitted that the petitioners be given the privileges of anticipatory bail.

Learned Addl.P.P appearing for the State opposes the prayer for anticipatory bail.

Considering the submissions of learned counsels and the facts and circumstances stated above, I am inclined to grant privileges of anticipatory bail to the petitioners. Accordingly, the petitioner of A.B.A. No.6521 of 2018 namely Smt. Renu Singh is directed to surrender in the Court of learned Chief Judicial Magistrate, Bokaro within four weeks from today and in the event of her arrest or surrendering, she will be enlarged on bail provisionally for a period of one month from the date of her surrender on showing proof of reversing input tax credit of ₹ 50,00,000/- with the Goods and Service Tax Department after the date of this order and on furnishing bail bond of ₹ 25,000/- (Twenty five thousand) with two sureties of the like amount each to the satisfaction of learned Chief Judicial Magistrate, Bokaro in connection with Bokaro Steel City P.S. Case No.121 of 2018 corresponding to G.R. No.663 of 2018 with the condition that she will co-operate with the investigation of the case and appear before the investigating officer as and when noticed by him and furnish her mobile number and photocopy of the Aadhar Card with an undertaking that she will not change her mobile number during the pendency of the case and subject to the conditions as laid down under Section 438(2) of the Code of Criminal Procedure. In case the petitioner of A.B.A. No.6521 of 2018 namely Smt. Renu Singh files another proof of reversing input tax credit of ₹ 50,00,000/- with the Goods and Service Tax Department within the period for which the provisional bail is granted, then the provisional bail shall be extended for further one month from the date of her deposit by the trial court. Accordingly, on showing proof of reversing input tax credit of ₹ 50,00,000/- with the Goods and Service Tax Department, the provisional bail granted to the petitioner of A.B.A. No.6521 of 2018 namely Smt. Renu Singh shall be extended for a period of further one month and on the petitioner showing the last proof of reversing input tax credit of ₹ 42,64,476.59 with the Goods and Service Tax Department thereby completing payment of the total amount of ₹ 2,92,64,476.59 on or before six months of the date of her surrender in the learned court below, the provisional bail granted to the her shall be confirmed by the trial court till disposal of the case.

It is made clear that in case of failure of the petitioner of A.B.A. No.6521 of 2018 namely Smt. Renu Singh to reverse any of the installments of input tax credit as mentioned above, the provisional bail granted to her shall stand cancelled and the trial court will take appropriate steps for her apprehension for facing the trial.

So far as petitioner of A.B.A. No.4745 of 2018 namely Nikit Mittal is concerned, the petitioner of A.B.A. No.4745 of 2018 namely Nikit Mittal is directed to surrender in the Court of learned Chief Judicial Magistrate, Bokaro within one month from today and in the event of his arrest or surrendering, he will be enlarged on bail on showing proof of reversing input tax credit of ₹ 1,06,282/- to the Goods and Service Tax Department after the date of this order and on furnishing bail bond of ₹ 25,000/- (Twenty five thousand) with two sureties of the like amount each to the satisfaction of learned Chief Judicial Magistrate, Bokaro in connection with Bokaro Steel City P.S. Case No.121 of 2018 corresponding to G.R. No.663 of 2018 with the condition that he will cooperate with the investigation of the case and appear before the investigating officer as and when noticed by him and furnish his mobile number and photocopy of the Aadhar Card with an undertaking that he will not change his mobile number during the pendency of the case and subject to the conditions as laid down under Section 438(2) of the Code of Criminal Procedure.

M/S K.Y. TOBACCO WORKS PVT. LTD. VERSUS STATE OF U.P. AND 3 OTHERS

Seizure of goods – alleged irregularities found in the documents accompanying the goods – HELD THAT:- List this matter on 31.10.2019.

In the meantime, subject to deposit of security other than cash or bank guarantee or in the alternative accept an indemnity bond, equal to the value of tax and penalty, if any, to the satisfaction of seizing authority, the goods of the petitioner along with the vehicle may be released forthwith.

No.- WRIT TAX No. – 1076 of 2019

Dated.- September 24, 2019

Bharati Sapru And Rohit Ranjan Agarwal, JJ.

For the Petitioner :- Pooja Talwar

For the Respondent :- C.S.C.,A.S.G.I.,Om Prakash Srivastava

Bharati Sapru, J.

ORDER

Heard Ms. Pooja Talwar, learned counsel for the petitioner and Shri C.B.Tripathi and Shri O.P. Srivastava, learned Counsel for the respondents.

The goods of the petitioner were being carried from Ghaziabad to Delhi and have been seized on the basis of certain alleged irregularities found in the documents accompanying the goods.

Learned Special Counsel prays for is granted one month’s time to file a counter affidavit.

List this matter on 31.10.2019.

In the meantime, subject to deposit of security other than cash or bank guarantee or in the alternative accept an indemnity bond, equal to the value of tax and penalty, if any, to the satisfaction of seizing authority, the goods of the petitioner along with the vehicle may be released forthwith.

INDIA LOGISTICS AND CARGO MOVERS VERSUS THE STATE OF GUJARAT

Detention of goods alongwith the truck – E-way bills of three parties not generated – petitioner agreed to pay tax and penalty as stipulated under section 129 of the GST Act – Confiscation of goods – HELD THAT:- mainly due to the fact that 14 invoices are not properly signed, the authorities have exercised powers under section 130 of the CGST Act and calculated tax, penalty and fine thereunder. If that be so, since none of the 14 invoices relate to the parties whose goods are confiscated, under the circumstances, the goods belonging to them could not have been confiscated by the respondent authorities.

It is an admitted position that in this case no detention order under section 129 of the CGST Act/GGST Act has been made in this case and the respondents have directly resorted to the provisions of confiscation under section 130 of the said Acts.

On reading the impugned order of confiscation in its entirety, it is manifest that the third respondent has not assigned any reason whatsoever as to why the goods and conveyance were required to be confiscated. Despite the fact that the petitioner and Anjani Synthetics Limited had submitted explanations in respect of the discrepancies noticed by the third respondent, there is no reference to the same in the impugned order. Thus, the third respondent without applying his mind to the facts of the case appears to have mechanically passed the impugned order without assigning any reasons worth the name for confiscating the goods and conveyance.

The impugned order has been passed without any application of mind and without considering the explanation submitted by the petitioner and Anjani Synthetics Limited and in undue haste. Moreover, despite the fact that out of 61 consignments, the third respondent has noticed deficiencies only in respect of three consignments, the conveyance of the petitioner is also sought to be confiscated, that too without assigning any reasons as to how the petitioner has sought to evade payment of tax – it was incumbent upon the third respondent to give reasons in support of his conclusion that the goods in question and the conveyance are required to be confiscated. However, the impugned order is totally bereft of any reasons, in the absence of which the order stands vitiated due to non-application of mind on the part of the maker of the order. The impugned order dated 28.5.2019, therefore, cannot be sustained.

Petition allowed.

No.- R/SPECIAL CIVIL APPLICATION NO. 15178 of 2019

Dated.- September 24, 2019

Citations:

  1. KRANTI ASSOCIATES PVT. LTD. Versus MASOOD AHMED KHAN – 2010 (9) TMI 886 – Supreme Court

MS HARSHA DEVANI AND MS SANGEETA K. VISHEN, JJ.

For The Petitioner (s) : MANASVI THAPAR (8198)

For The Respondent (s) : MS MAITHILI MEHTA, ASSISTANT GOVERNMENT PLEADER

ORAL JUDGMENT

(PER : HONOURABLE MS.JUSTICE HARSHA DEVANI)

1. Rule. Ms. Maithili Mehta, learned Assistant Government Pleader waives service of notice of rule on behalf of the respondents.

2. Having regard to the controversy involved in the present petition and with the consent of the learned advocates for the respective parties, the matter was taken up for final hearing.

3. By this petition under article 226 of the Constitution of India, the petitioner has challenged the notice dated 16.5.2019 issued in Form GST MOV-10 (Annexure-A) as well as the detention/confiscation order dated 16.5.2019/28.5.2019 issued by the third respondent in Form GST MOV-11 and seeks a direction to the respondent authorities to forthwith release truck No.GJ-27-X-3752 along with the goods contained therein.

4. The facts stated briefly are that the petitioner, a sole proprietorship firm, which is inter alia engaged in the business of transport, procured about 61 different customers. On 16.5.2019 at 13:50 hours while the goods were in transit in vehicle No.GJ-27-X-3752, the third respondent – State Tax Officer, Mobile Squad, Enforcement, Division-2, Ahmedabad intercepted the vehicle at Narol Char Rasta and found that the e-way bills of three parties, namely, Anjani Synthetics Limited dated 30.4.2019, Neelam Fabrics dated 15.5.2019 and Bhansali Cotfab dated 16.5.2019 were not generated. The statement of the driver in charge of the vehicle came to be recorded in Form GST MOV-1. It appears that the goods in respect of 58 customers wherein there were valid e-way bills came to be released; however, the vehicle with the goods in respect of the above three parties came to be detained on the spot on 16.5.2019 by issuing a notice in Form GST MOV -10 under section 130 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the “CGST Act”) as well as the Gujarat Goods and Services Tax Act, 2017 (hereinafter referred to as the “GGST Act”). [Both the above Acts together are hereinafter referred to as the “GST Acts”]. It appears that the petitioner provided justification for not generating the above mentioned e-way bills; however, there was no response from the respondents. It further appears that the petitioner agreed to pay the tax and penalty as calculated on the basis of transaction value in the invoice as envisaged under section 129 of the GST Acts. However, the second respondent passed an order dated 28.5.2019 increasing the value of goods by 20% and confiscating the goods under section 130 of the GST Acts. Being aggrieved by the continued detention/seizure of its goods, the petitioner has filed the present writ petition seeking the reliefs noted hereinabove.

5. Mr. Manasvi Thapar, learned advocate for the petitioner, submitted that the continued detention/seizure of the goods and vehicle of the petitioner, despite the petitioner having agreed to pay tax and penalty as stipulated under section 129 of the GST Acts, is wholly without jurisdiction, arbitrary and illegal. It was submitted that section 129(1) of the GST Acts clearly provides for release of any goods detained/seized under the section on payment of applicable tax and penalty equal to hundred percent. Therefore, non-release of the goods detained despite the petitioner having shown willingness to make such payment is wholly without jurisdiction, arbitrary and illegal. It was further submitted that the confiscation notice has directly been issued on 21.5.2019 in purported exercise of powers under section 130 of the GST Acts without completing the procedure under section 129 thereof and thereafter the third respondent has proceeded to pass the impugned order of confiscation dated 28.5.2019, which is wholly without jurisdiction and illegal.

5.1 It was further submitted that the impugned order of confiscation is pre-determined and without application of mind. It was urged that while admittedly the notice for confiscation is dated 16.5.2019, it was served upon the petitioner on 21.5.2019 and that despite the petitioner having made submissions objecting to the confiscation, in the impugned order of confiscation, it has been recorded that the petitioner has not filed any objections. It was submitted that this indicates that the impugned order has been passed in a predetermined manner without application of mind and therefore also, the same is arbitrary and illegal is required to be set aside. It was further submitted that the goods were duly accompanied by tax invoice as well as transport receipt and only e-way bills of the above three customers could not be generated by the petitioner due to reasons which have been stated before the respondent authorities. It was submitted that there was no intention on the part of the petitioner to evade payment of tax under the GST Acts and hence, the continued detention of the goods and the truck is arbitrary and illegal. It was accordingly, urged that the impugned order of confiscation deserves to be quashed and set aside and that the respondents are required to be directed to release the goods as well as the conveyance.

6. Opposing the petition, Ms. Maithili Mehta, learned Assistant Government Pleader, placed reliance upon the averments made in the affidavit-in-reply filed on behalf of the third respondent wherein it is stated that the vehicle in question was confiscated on 16.5.2019 directly in exercise of powers under section 130 of the Goods and Services Tax Act, 2017. The ground for confiscation of the said vehicle was that qua three e-way bills, Part-B was not found from the vehicle, meaning thereby, out of 61 consolidated e-way bills, Part-B was only for 58 consignments and Part-B of e-way bills of three consignments was not traceable. It is further submitted that the authorities could find invoices qua all 61 consignments but out of those 61 invoices, 14 invoices were quite doubtful as they did not bear the signatures of the authorized persons issuing the said invoices. [The details of the 14 invoices are set out in the affidavit-in-reply.] It was submitted that the authorities have, therefore, presumed that the said invoices are fake and are drawn with an intention to evade tax.

6.1 It is further submitted that the earlier representation dated 20.5.2019 was given by the petitioner who is the transporter and that neither the purchaser nor the suppliers have given any explanation in respect of the 14 invoices which do not bear any signature and that the explanations dated 20.5.2019 and 28.5.2019 are mainly qua non-possession of Part-B of the e-way bill. It is categorically averred in the affidavit-in-reply that mainly due to the fact that 14 invoices were not properly signed, the authorities have exercised powers under section 130 of the Goods and Services Tax Act, 2017 and calculated tax and penalty considering the provisions of section 130 of the Goods and Services Tax Act, 2017. The learned Assistant Government Pleader accordingly, urged that the authorities have duly followed the provisions of law and having found serious irregularities, have passed the order of confiscation under section 130 of the Goods and Services Tax Act, 2017 which is just legal and proper. It was accordingly, urged that the petition being devoid of merits deserves to be dismissed.

7. In the backdrop of the facts and contentions noted hereinabove, it is an admitted position that in this case no detention order under section 129 of the CGST Act/GGST Act has been made in this case and the respondents have directly resorted to the provisions of confiscation under section 130 of the said Acts.

8. A perusal of the notice dated 16.5.2019 issued under section 130 of the CGST Act/GGST Act whereby the third respondent proposes to confiscate the goods and conveyance, reveals that the vehicle in question was intercepted in exercise of powers under sub-section (3) of section 68 of the CGST Act/ GGST Act as well as other statutory provisions and it was found that certain discrepancies as reproduced hereunder were noticed:

“(i) After verification of documents, tendered during the movement of goods in vehicle, valid e-way bill not generated for the following bills.

a. Anjani Synthetic Limited bill no.F.1286/1920 dated:30.04.2019

b. Neelam Fabrics bill no.55 dated 15.05.2019

c. Bhansali Cotfab bill no.211 dated 16.05.2019

(ii) Transporter is aware about consolidated e-way bill as he has generated the same for 58 transactions of which goods transported through the same truck, while he has not included above mentioned 3 transaction in that consolidated e-way bill. In addition to that documents tendered for the goods in movement there are 14 bill of supply found without authorized signature and no clarification received from taxable persons. So those invoices are not valid invoices because not bearing signatures of suppliers.

(iii) With reference to bill of M/s. Anjani Synthetics Ltd. Dated;30.04.2019, submitted that the goods was sent to the transporter with a bill of supply and e-way bill part – A on 30.04.2019, but confirmation was not received from the recipient, so the goods were stored in the godown of transporter till 16.05.2019 after receiving the confirmation goods were dispatched. But he has not provided any proof for supporting his submission. Also, the transporter has not included the same transaction in his consolidated e-way bill. So, it is presumed that he is also involved in the evasion of the tax for the above bill.

(iv) The documents tendered for the transactions mentioned in (i) are not valid according to sec.68 of GGST Act, 2017 as there is no signature of the authorized person.

(v) As per the above detail it is clear that taxable persons are evading tax by not generating e-way bill part-B.

(vi) No supplier came forward for the clarification for not generating e-way bill part B and about the bill of supply without an authorized signature.

(vii) Value of goods are increased by 20% for the calculation of tax, penalty and fine u/s.130.”

9. By the said notice, the petitioner was called upon to appear before the third respondent by 27.5.2019. It is the case of the petitioner that the notice dated 16.5.2019 was served upon it on 21.5.2019. It appears that in the meanwhile, the petitioner, by a communication dated 20.5.2019, requested the respondent to release the goods in respect of which there was no dispute, pursuant to which, the goods pertaining to 58 parties appear to have been released. The petitioner by a separate communication of the same date also offered explanations in respect of the goods of the three parties in respect of which disputes were raised. By a communication dated 21.5.2019 one of the three parties, viz., Anjani Synthetics Limited, tendered its explanation for the deficiencies pointed out by the third respondent.

10. Thereafter, by the impugned order dated 28.5.2019, the following goods and conveyance came to be confiscated by the third respondent in the exercise of powers vested under section 130 of the CGST Act/GGST Act and other statutory provisions whereby tax, penalty, and fine in lieu of confiscation of goods and conveyance came to be imposed:

DETAILS OF GOODS CONFISCATED

SL

No.

Description of goods HSN Code Quantity Value
1 CLOTH A 7,291 MTR  ₹ 6,79,301
2 CLOTH N 598.25 MTR ₹ 65,580
3 CLOTH B 1,786.70 MTR  ₹ 2,18,237

DETAILS OF CONVEYANCE CONFISCATED

SL

No.

 Description Details
1 Conveyance Registration No. GJ 27 X 3752
2 Vehicle Description
3 Engine No.
4 Chasis No.

It appears that the petitioner has also given an explanation dated 28.5.2019.

11. A perusal of the impugned order dated 16.5.2019/28.5.2019 reveals that the notice in Form GST MOV- 10 dated 16.5.2019 was issued on 21.5.2019. By virtue of the impugned order, goods in respect of only three parties and the conveyance have been confiscated. The goods confiscated are in respect of the three parties referred to hereinabove.

12. In the impugned order in paragraph 5, it has been recorded thus:

5. The person in charge has not filed any objections/ the objections filed were found to be not acceptable for the reasons stated below:

a) ……”

Thereafter, in paragraph 6, it has been recorded thus:-

6. In view of the above, the following goods and conveyance are confiscated by the undersigned by exercising the powers vested under section 130 of the Central Goods and Services Tax Act and under section 130 of the State Goods and Services Tax Act/Section 21 of the Union Territory Goods and Services Tax Act or under section 20 of the Integrated Goods and Services Tax Act which are listed as under:”

SL

 No.

Description of goods HSN Code Quantity Value
1 CLOTH A 7,291 MTR ₹ 6,79,301
2 CLOTH N 598.25 MTR ₹ 65,580
3  CLOTH B 1,786.70 MTR ₹ 2,18,237

13. On reading the impugned order of confiscation in its entirety, it is manifest that the third respondent has not assigned any reason whatsoever as to why the goods and conveyance were required to be confiscated. Despite the fact that the petitioner and Anjani Synthetics Limited had submitted explanations in respect of the discrepancies noticed by the third respondent, there is no reference to the same in the impugned order. Thus, the third respondent without applying his mind to the facts of the case appears to have mechanically passed the impugned order without assigning any reasons worth the name for confiscating the goods and conveyance. The respondents should be aware that orders of confiscation under section 130 of the CGST Act/GGST Act have serious civil consequences for the transporter as well as the owner of the goods. Therefore, the least that is expected of the authorities discharging duties under these Acts is that they should properly apply their minds to the facts of the case before taking drastic action under the provisions of section 130 of the CGST Act/ GGST Act. Passing orders in a perfunctory manner has been done in the present case without considering the explanations tendered by the affected parties and without assigning reasons, therefore, amounts to an abdication of duties on the part of the concerned officer and causes immense prejudice to the parties.

14. It may further be noted that while the impugned order is bereft of any reasons, in the affidavit-in-reply filed on behalf of the third respondent, it has been stated that Part-B of the way bill for three consignments was not traceable. Another ground put forth is that, in all, there were 61 consignments, and that out of 61 invoices, 14 invoices were doubtful as they did not bear the signature of the authorized person issuing the said invoices. However, a perusal of the details of the 14 invoices as reflected in the impugned order shows that none of them relate to the three parties whose goods are sought to be confiscated. It has been stated by the third respondent that none of the purchasers/suppliers have given any explanation qua the 14 invoices which clearly indicates that even the affidavit-in-reply has been filed without proper application of mind, inasmuch as, the goods relating to the 14 invoices have not been confiscated. In the affidavit-in-reply, it has also been stated that mainly due to the fact that 14 invoices are not properly signed, the authorities have exercised powers under section 130 of the CGST Act and calculated tax, penalty, and fine thereunder. If that be so, since none of the 14 invoices relate to the parties whose goods are confiscated, under the circumstances, the goods belonging to them could not have been confiscated by the respondent authorities.

15. In the light of the above discussion, it appears that the impugned order has been passed without any application of mind and without considering the explanation submitted by the petitioner and Anjani Synthetics Limited and in undue haste. Moreover, despite the fact that out of 61 consignments, the third respondent has noticed deficiencies only in respect of three consignments, the conveyance of the petitioner is also sought to be confiscated, that too without assigning any reasons as to how the petitioner has sought to evade payment of tax.

16. It may be noted that while there appears to be a format for an order under section 130 of the CGST Act, such format also provides a column for assigning reasons therefor. However, as noted hereinabove, that column has been left blank. At this juncture it may be apposite to refer to the decision of the Supreme Court in Kranti Associates (P) Ltd. v. Masood Ahmed Khan, (2010) 9 SCC 496wherein the court in the context of necessity to give reasons, has held thus:

47. Summarising the above discussion, this Court holds:

(a) In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially.

(b) A quasi-judicial authority must record reasons in support of its conclusions.

(c) Insistence on the recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well.

(d) Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power.

(e) Reasons reassure that discretion has been exercised by the decision-maker on relevant grounds and by disregarding extraneous considerations.

(f) Reasons have virtually become as indispensable a component of a decision-making process as observing principles of natural justice by judicial, quasi-judicial, and even by administrative bodies.

(g) Reasons facilitate the process of judicial review by superior courts.

(h) The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favor of reasoned decisions based on relevant facts.

This is virtually the lifeblood of judicial decision-making justifying the principle that reason is the soul of justice.

(i) Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants’ faith in the justice delivery system.

(j) Insistence on reason is a requirement for both judicial accountability and transparency.

(k) If a judge or a quasi-judicial authority is not candid enough about his/her decision-making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism.

(l) Reasons in support of decisions must be cogent, clear and succinct. A pretense of reasons or “rubberstamp reasons” is not to be equated with a valid decision-making process.

(m) It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision-making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor.)

(n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decision-making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See Ruiz Torija v. Spain, (1994) 19 EHRR 553 and Anya v. University of Oxford, 2001 EWCA Civ 405 (CA), wherein the Court referred to Article 6 of the European Convention of Human Rights which requires, “adequate and intelligent reasons must be given for judicial decisions”.

(o) In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for the development of law, the requirement of giving reasons for the decision is of the essence and is virtually a part of “due process”.”

17. Thus, it was incumbent upon the third respondent to give reasons in support of his conclusion that the goods in question and the conveyance are required to be confiscated. However, the impugned order is totally bereft of any reasons, in the absence of which the order stands vitiated due to nonapplication of mind on the part of the maker of the order. The impugned order dated 28.5.2019, therefore, cannot be sustained. Since the court is inclined to set aside the impugned order on the ground that it is a non-speaking order, ordinarily, it would remand the matter to the authority to decide the same afresh by assigning proper reasons. However, in the facts of the present case, the third respondent has filed an affidavit-in-reply which has been extensively referred to hereinabove. As discussed earlier, on the grounds set forth in the affidavit-in-reply, the goods in question could not have been confiscated. Under the circumstances, no useful purpose would be served in remanding the matter to the third respondent.

18. For the foregoing reasons, the petition succeeds and is, accordingly, allowed. The impugned order dated 28.5.2019 passed by the third respondent in the exercise of powers under section 130 of the CGST Act/GGST Act is hereby quashed and set aside. The respondents are directed to forthwith release the conveyance, namely, truck No. GJ-27-X-3752 along with the goods contained therein. The rule is made absolute accordingly.

Direct service is permitted.