2020 (10) TMI 898 - HC - GST

Demand of GST alongwith interest and penalty - refund of penalty amount - Detention of vehicle alongwith the goods - HELD THAT - While goods which were on their way from New Delhi to Gorakhpur being intercepted at Sikandara Toll Plaza by the mobile squad of the taxing authorities found the papers, accompanying the goods, not being in conformity, a show cause notice was given by the authorities and was served upon the driver of the vehicle in question and a reply was submitted. On the same day the penalty order was passed and was served upon the driver itself and the amount of tax demand as well as penalty was deposited by the petitioner on the same day i.e. 14.08.2018, pursuant to which the goods and vehicle were released. The petitioner neither in the present writ petition nor in the grounds of appeal before the first Appellate Authority had disclosed the fact that during which period the order dated 14.08.2018 was not reflected on the web-portal of the department and when did he came to know that the appeal could be filed offline. In the rejoinder affidavit filed by the petitioner it is only submitted that the demand order as well as penalty order dated 14.08.2018 was not uploaded but no specific denial has been made to the averment made by the department that all the orders are uploaded on the web-portal of the department and similarly the demand order as well as penalty order dated 14.08.2018 passed against the petitioner was also uploaded on the web-portal - Moreover, in the rejoinder affidavit the petitioner has tried to build up a case that the order was served upon the driver of the vehicle in question which will not amount to the service upon the petitioner. This assertion cannot be accepted as from the perusal of memo of the appeal it is clear that the date of communication of order has been mentioned specifically as 14.08.2018. As in the present case the petitioner was very well aware of the fact that against the penalty order dated 14.08.2018 he had the remedy of filing the appeal but the same was not availed within the statutory limit provided under Section 107 of the Act, but he has approached the first Appellate Authority after a delay of eight months on the ground that the web-portal of the department did not reflect the penalty order, while the same has been categorically denied by the department, to which the petitioner failed to respond with concrete answer, thus, no indulgence can be granted and the writ petition being devoid of merit is hereby dismissed .

Issues Involved:
1. Validity of the penalty order under Section 129(3) of the U.P. G.S.T. Act, 2017.
2. Delay in filing the appeal before the first Appellate Authority.
3. Service of the penalty order upon the driver of the vehicle.
4. Non-reflection of the penalty order on the web portal.
5. Applicability of the Limitation Act to the appeal process under the GST Act.
6. Reliance on previous judgments and their applicability.

Detailed Analysis:

1. Validity of the Penalty Order:
The petitioner, a registered dealer under the GST Act, was engaged in the business of buying and selling plastic granules. The vehicle carrying the goods was intercepted by the tax department, revealing discrepancies in the documents. Consequently, a tax and penalty of ?3,52,800 each, totaling ?7,05,600, was imposed under Section 129(3) of the U.P. G.S.T. Act, 2017. The petitioner argued that the penalty was arbitrary and based on minor clerical errors in the E-way Bill, specifically the wrong vehicle number.

2. Delay in Filing the Appeal:
The petitioner challenged the penalty order after eight months, arguing that the order was not available on the web portal and the driver did not inform them. The first Appellate Authority rejected the appeal on the grounds of delay. The petitioner contended that the delay should be condoned as they were unaware of the offline filing process.

3. Service of the Penalty Order:
It was argued that the service of the penalty order upon the driver did not constitute proper service to the petitioner. However, the court noted that the petitioner acknowledged the communication date as 14.08.2018 in the memo of appeal and deposited the penalty amount on the same day, indicating awareness of the order.

4. Non-Reflection of the Penalty Order on the Web Portal:
The petitioner claimed that the penalty order was not reflected on the web portal, which delayed their appeal. The court found no evidence supporting this claim, as the petitioner did not specify the period during which the order was not available online. The department asserted that all orders, including the penalty order, were uploaded on the web portal.

5. Applicability of the Limitation Act:
The court referred to the Supreme Court's decision in Singh Enterprises vs. Commissioner of Central Excise, which held that the Appellate Authority cannot condone delays beyond the statutory period. The court emphasized that the remedy of appeal is a creature of statute and the statutory period for filing an appeal cannot be extended by the High Court under Article 226 of the Constitution of India.

6. Reliance on Previous Judgments:
The petitioner relied on previous judgments where delays were condoned. However, the court distinguished these cases based on their facts. In M/S Jindal Pipes Limited, the service of the order upon the driver was not considered proper service. In M/S Central Industrial Security Force, the delay was not due to the petitioner's fault. The court found these cases inapplicable to the present matter.

Conclusion:
The court dismissed the writ petition, finding no merit in the petitioner's arguments. The petitioner failed to provide concrete evidence that the penalty order was not reflected on the web portal or that they were unaware of the offline filing process. The court upheld the statutory limitation period for filing appeals under the GST Act and denied condoning the delay. However, the court provided the petitioner the option to file an appeal before the Tribunal once constituted, as per the notification by the Ministry of Finance.

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