2018 (11) TMI 1075 - HC - GST

Detention of goods - demand of IGST - petitioner paid the amount through the portal - case of Revenue is that the petitioner ought to have paid the tax and penalty either through cash or through Demand Draft - Held that - Evidently it is only a service provider, having no role to pay in the apportionment. Further, the Government both at the Centre and in the State, have ushered in the GST Tax regime to ensure that everything is made online with minimum manual interventions. Yet strangely, the authorities still insist that the payment should be by physical means either in cash or through Demand Draft. That insistence seems to be archaic and out of tune with the very spirit of the GST regime. In apportionment, there may be delays and difficulties, but the tax payer cannot be made to suffer, on that count. Petition disposed off.

Summary

Issues:
Detention of goods under Section 129(3) of the GST Act for non-payment of IGST, refusal to release goods despite payment through portal, apportionment of tax liability between Centre and State, role of GST Network in tax apportionment, insistence on physical payment methods by tax authorities.

Analysis:
The petitioner, a registered dealer, faced detention of goods for non-payment of IGST under Section 129(3) of the GST Act. The Assistant State Tax Officer demanded payment of IGST @ 18% and IGST @ 18% totaling to ?5,28,834 through Ext.P2 notice. The petitioner paid the amount via the portal and obtained Ext.P3 payment receipt. However, the Assistant State Tax Officer refused to release the goods, insisting on cash or Demand Draft payment. This led to the filing of a writ petition by the petitioner challenging the detention of goods.

The Court was informed that the tax liability must be apportioned between the Centre and the State as it falls under IGST. The Government Pleader suggested involving the GST Network to resolve the issue. Consequently, the GST Network was added as the 2nd respondent. The Standing Counsel for GST Network clarified that they are only an infrastructure provider and do not have a statutory role in tax apportionment between the Centre and the State.

Reference was made to a previous judgment, Ext.P4, where a similar issue was addressed. The Court in the previous case had directed the release of goods upon payment through the portal, emphasizing that physical payment methods were not necessary. Considering this precedent, the Court held that the Assistant State Tax Officer should release the goods and the vehicle immediately.

The Court criticized the insistence of tax authorities on physical payment methods like cash or Demand Draft, stating that it goes against the online nature of the GST regime. The Court emphasized that delays in apportionment should not burden the taxpayer. Relying on the principles established in the previous judgment, the Court ordered the immediate release of goods by the Assistant State Tax Officer.

In conclusion, the writ petition was disposed of in favor of the petitioner, directing the release of goods by the Assistant State Tax Officer in line with the judgment in Fashion Marbles and Granites Pvt. Ltd. v. Assistant State Tax Officer.