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2021 (10) TMI 835 - HC - GSTDetention of goods - adjudication of ownership of goods - Section 129 of the Central Goods and Services Tax Act, 2017 - HELD THAT - The department can claim at the most that there was a hidden transaction between the 5th respondent and the petitioner due to which the State lost the tax due to it. The transaction during which interception of the goods were carried out was between the petitioner and the consignee in Ext.P2. If the department's assumption is acceptable, it could be assumed that there was an evasion of tax in the transaction between the 5th respondent and petitioner. However that transaction could be only prior to Ext.P2 invoice. No doubt it is for that alleged hidden transaction that evasion of tax was suspected. Be that as it may after Ext.P2 invoice was generated, there is no case that there is any suspected evasion of tax since IGST is already reflected in Ext.P2. Thus from the time of generation of Ext.P2, petitioner is the owner of the goods as he is the consignor in Ext.P2. The mandate of Section 130 will be defeated if the goods are not released to the person who holds the invoice at the time of interception when the entire penalty, fine and tax are tendered - Since on 17.08.2021, petitioner had tendered, by Ext.P16, the entire fine, penalty and tax in lieu of confiscation, there is no justification for the 4th respondent to retain or detain goods and the vehicle any further. For filing counter affidavit in the writ petition, post on 20.09.2021.
Issues:
Challenge to summons and order of confiscation under Central Goods and Services Tax Act, 2017; Dispute over release of detained goods; Interpretation of 'owner' under the Act; Application of Circular No.76/50/2018-GST; Determination of ownership based on invoice; Mandate of Section 130 for release of goods. Analysis: The petitioner challenged the summons and order of confiscation under the Central Goods and Services Tax Act, 2017. The petitioner contended that despite expressing willingness to pay the tax and penalty, the goods remained detained by the 4th respondent for over two months. The petitioner paid the penalty, fine, and tax imposed under the confiscation order but the goods were not released. The government pleader argued that the goods could only be released to the owner, claiming the 5th respondent as the true owner. The court noted that the Act does not define 'owner' and observed that the person generating the invoice for the goods can be deemed the owner. The court referred to a circular clarifying ownership determination when goods are accompanied by an invoice, emphasizing that the officer has no discretion in such cases. The court highlighted that the title to goods in a sale transaction is determined by the accompanying invoice. It rejected the department's argument of a hidden transaction between the 5th respondent and the petitioner, stating that the petitioner became the owner of the goods upon generating the invoice. The court emphasized that the mandate of Section 130 would be defeated if goods were not released to the invoice holder when penalties are paid. As the petitioner had paid all fines and taxes, the court directed the 4th respondent to release the goods within 24 hours of the order. The court concluded that the petitioner was entitled to the release of the goods under Section 130(2) of the Act. In conclusion, the court ruled in favor of the petitioner, directing the immediate release of the goods covered by the confiscation order. The judgment emphasized the importance of ownership determination based on the invoice and upheld the petitioner's right to the goods upon payment of fines and penalties. The court's decision was based on the interpretation of the Act, relevant circulars, and the principles of ownership in sale transactions.
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