2019 (12) TMI 1267 - HC - GST

Maintainability of petition - alternate remedy of appeal - refund claim - detention of goods alongwith vehicle - e-way bill - It is the appellant-writ petitioner s case that it is the Corporation which, instead of raising two separate e-way bills for two separate consignments, had raised one e-way bill for the total amount on both the consignments - HELD THAT - Sub-Sections (1), (6) and (7) of Section 107 of the CGST Act, it is evident that, while an appeal can be filed against any order or decision of an adjudicating authority, the pre- condition, for such an appeal to be filed, is payment of the demanded tax or penalty and 10% of the disputed amount. In the present case, there is no dispute regarding tax and it is the appellant-writ petitioner s case that the tax in its entirety has been paid to the Corporation which, in turn, is obligated to remit the said amount to the State Tax Department. Since the appellant-writ petitioner disputes levy of penalty in its entirety, they would, in terms of Section 107(6) of the CGST Act, only be required to deposit 10% of such penalty and as a result, in terms of Sub-Section (7) of Section 107 of the CGST Act, the remaining penalty need not be paid. That does not, however, solve the problem which the appellant-writ petitioner faces i.e. for release of the goods detained by the respondent-authorities. If, on the other hand, he were to comply with the demand notice issued under Section 129(1) of the CGST Act then, in terms of Section 129(5) of the CGST Act, on payment of the amount referred to in Sub-Section (1), all proceedings in respect of the notice specified in Sub-Section (3) shall be deemed to be concluded, in which event the goods would be released. In the facts and circumstances of the present case, to modify the order of the learned Single Judge and, instead, direct the appellant-writ petitioner to deposit the entire amount of penalty i.e. for a sum of ₹ 1,70,688/- with the concerned authorities, and furnish proof of deposit of the said amount along with the Appeal to be preferred under Section 107(1) of the CGST Act - On such deposit, and on an Appeal being preferred thereafter within the period of limitation prescribed under Section 107(1) of the CGST Act, the Appeal shall be entertained by the Appellate Authority, and shall be adjudicated on its merits. As soon as an Appeal is preferred by the appellant-writ petitioner, enclosing thereto proof of payment of total penalty amount of ₹ 1,70,688/-, the subject goods shall be released in their favour. It is made clear that, in case the Appeal is decided in the appellant-writ petitioner s favour, they shall then be entitled for refund of the amount deposited by them pursuant to the order - appeal disposed off.

Summary

Issues:
1. Dismissal of Writ Petition on the ground of alternative remedy under Section 107 of the CGST Act.
2. Dispute regarding penalty levied on the appellant-writ petitioner for issuance of one e-way bill instead of two.
3. Interpretation of Sections 107(1), 107(6), and 107(7) of the CGST Act regarding appeals and payment requirements.
4. Resolution of the issue of penalty payment and release of detained goods.

Analysis:
1. The appellant-writ petitioner challenged the dismissal of the Writ Petition by the Single Judge, arguing that the remedy under Section 107 of the CGST Act was not efficacious. The appellant contended that the remedy under Section 107 only provided for a stay of payment of the remaining amount, which would not allow them to take delivery of the seized goods. Thus, they invoked the jurisdiction of the High Court under Article 226 of the Constitution of India. The Court noted the appellant's arguments and proceeded to analyze the provisions of Section 107 of the CGST Act.

2. The Court examined Section 107 of the CGST Act, which allows appeals to the Appellate Authority against decisions or orders passed by adjudicating authorities. It was highlighted that Section 107(6) stipulates the conditions for filing an appeal, including the requirement to pay a sum equal to 10% of the remaining amount of tax in dispute. The Court emphasized the importance of payment requirements for filing an appeal under the CGST Act.

3. In the specific case, the appellant-writ petitioner had paid the tax in full to the Corporation but disputed the penalty levied on them. As per Section 107(6), they were only required to deposit 10% of the penalty amount to file an appeal. However, this did not address the issue of releasing the detained goods. The Court deliberated on the impact of paying the penalty under Section 129(5) of the CGST Act on the right to prefer an appeal.

4. To resolve the issue, the Court modified the Single Judge's order and directed the appellant-writ petitioner to deposit the entire penalty amount with the authorities and provide proof of deposit along with the appeal under Section 107(1) of the CGST Act. Upon deposit and filing of the appeal within the prescribed time, the Appellate Authority would entertain the appeal and decide on its merits. The Court ordered the release of the goods upon proof of payment of the penalty. It clarified that if the appeal succeeded, the appellant would be entitled to a refund. The Court emphasized the appellant's right to raise legal contentions before the Appellate Authority.

This detailed analysis of the judgment addresses the issues involved comprehensively, focusing on the legal interpretations and resolutions provided by the High Court in the case.