2019 (8) TMI 1151 - HC - GST

Detention order - claim of ownership - Section 129 of the Central Goods and Services Tax Act, 2017 - whether the appellant is either a consignee or a consignor and whether the invoice and other documents are genuine documents? - HELD THAT - the appellant can always contend before the concerned authority that in view of the circular dated 31st December 2018, in particular clause (6) thereof, the appellant will have to be treated as the owner of the detained goods and therefore, the penalty payable will be as per clause (a) of sub-section (1) of Section 129 of the said Act of 2017. Though the notice proceeds on the footing that clause (b) of sub-section (1) of Section 129 is applicable, the concerned authority will have to consider the applicability of sub-section (1) of Section 129 and if prayed to that effect, whether the appellant is entitled to the benefit of clause (c) of sub-section (1) of Section 129 of the said Act of 2017. While passing a speaking order in terms of the order of the learned Single Judge, the aforesaid aspects shall also be taken into consideration by the concerned authority. Appeal disposed off.

Summary

Issues:
Challenge to order of detention under Section 129 of the Central Goods and Services Tax Act, 2017 and notice issued under sub-section (3) of Section 129.

Analysis:
The appellant challenged an order of detention under Section 129 of the Central Goods and Services Tax Act, 2017, as well as the notice issued under sub-section (3) of the same Act through writ petitions under Article 226 of the Constitution of India. The appellant contended that the impugned notice invoked clause (b) of sub-section (1) of Section 129, assuming the appellant as the owner of the goods. The appellant referred to a circular issued by the Central Board of Indirect Taxes and Customs, GST Policy Wing, which stated that if the invoice or specified document accompanies the goods, either the consignor or consignee should be deemed as the owner. Thus, the appellant argued that even if a penalty is to be paid, it should be under clause (a) and not clause (b) of sub-section (1) of Section 129.

The appellant also mentioned that clause (c) of sub-section (1) of Section 129 provides an option for the release of detained goods. The High Court Government Pleader raised concerns about the authenticity of the documents produced by the appellant, emphasizing the need to determine whether the appellant is a consignee or consignor and the genuineness of the accompanying invoice and other documents. The Single Judge allowed the appellant to submit additional documents and directed the authorities to issue a detailed order within four weeks.

In response to the detention order, the appellant filed a response, but no reply was filed to the notice under sub-section (3) of Section 129. Consequently, the Single Judge permitted the appellant to provide additional explanation. The Court directed that the concerned authority should consider whether the appellant can be treated as the owner of the detained goods in light of the circular dated 31st December 2018 and whether the release of goods can be allowed upon the appellant furnishing security as provided in clause (c) of sub-section (1) of Section 129. The Court disposed of the appeals, extending the time to file additional explanations and documents by one week and concluding that the factual finding regarding the appellant's status as the owner should be determined by the authority as per the Single Judge's order.